M/s Maruti & Company v. Karnataka Chemists & Druggists Association & Others

CCI28 Jul 201671/2013

Case brief

AI extract

What is this about?

The Competition Commission held that the Karnataka Chemists & Druggists Association mandating NOC for new stockist appointments violated Section 3, and Lupin Ltd. colluded in this anti-competitive practice. Both were penalized along with their responsible officers.

What did the court decide?

Cease and desist from mandating NOC; penalty of Rs. 8,60,321 imposed on OP-1; penalty of Rs. 72.96 crores imposed on OP-4; penalties imposed on respective officers.

What the court decided

AI extract

M/s Maruti & Company Vs Karnataka Chemists… — Constitutional and Fundamental Rights | CCI (2016)

M/s Maruti & Company v. Karnataka Chemists & Druggists Association & Others

CCI28 Jul 201671/2013

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Case brief

AI extract

What is this about?

What did the court decide?

Cease and desist from mandating NOC; penalty of Rs. 8,60,321 imposed on OP-1; penalty of Rs. 72.96 crores imposed on OP-4; penalties imposed on respective officers.

What the court decided

AI extract

¶18

For the Informant:	Mr. H. Chandra Sekhar, Advocate Mr. Vinod Verma
For OP-1 and Mr. A.K. Jeevan:	Mr. Sanjoy Ghose, Advocate Ms. Pratishtha Vij, Advocate Mr. N. Padmakar Nayak, Member (OP-1)
For OP-2:	Mr. Rahul Goel, Advocate Ms. Anu Monga, Advocate Mr. Neeraj Lalwani, Advocate Mr. Nitish Sharma, Advocate
For OP-3, OP-4 and
Mr. Nishant Ajmera:	Mr. Ramji Srinivasan, Sr. Advocate Mr. Manas Kumar Chaudhari, Advocate Mr. Sagardeep Singh, Advocate Mr. Pranjal Prateek, Advocate Mr. R. Kumar, Legal Mr. Vivek Mittal, Head Legal
For Mr. D.S. Guddodgi:	Dr. Vijay Kumar Aggarwal, Advocate Mr. Ankush Walia, Advocate

¶319

Karnataka Chemists and Druggists Association (Regd) Bangalore ’ clearly specify that the affairs of the Association ( i.e. OP-1) shall be conducted by the Managing Committee (MC) and that absolute control over the affairs of the Association shall vest with the Working Committee (WC). Most of the WC and MC meetings, relied upon by the Commission to arrive at a finding of a contravention of Section 3 by OP-1, were held when Mr. D.S. Guddodgi was the President, Mr. A.K. Jeevan was the Vice-President and Mr. K. E. Prakash ( i.e. OP-2) was the Secretary of OP-1. These positions of responsibility held by these individuals within OP-1 highlight their role in the impugned NOC practice and anti-competitive activities of OP-1. Though all these three office bearers have attempted to either shirk or shift their responsibility on each other for the conduct of OP-1, each of them is found to be in charge of and held to be responsible for the affairs of OP-1. They are, thus, deemed to be guilty of the anti-competitive conduct of OP1. In addition to their active involvement in the anti-competitive conduct of OP-1 which makes them liable under Section 48(2) of the Act, they are also held to be liable under Section 48(1) of the Act by virtue of the positions held by them in OP-1, at the time when the anti-competitive conduct found to be in contravention of the provisions of the Act took place. They being Secretary/President/Vice-President for various time period, as stated earlier, coupled with their active involvement, shows that they were in-charge of and responsible for conducting the affairs of OP-1. Given the position held by each one of them at OP-1’s WC and MC, it is not possible that OP-1 could have carried out the anti-competitive practice of mandating NOC without their knowledge. They failed to produce any evidence to demonstrate that the contravention was committed without their knowledge. Rather, the Commission has found their active connivance in the commission of the contravention.

Year	Income during the Year (in Rupees)
2012-2013	9152484
2013-2014	8053928
Total	17206412
Average	8603206
10% of Average Income	860321
(PenaltyAmount)

¶341

Year	K.E. Prakash	A.K. Jeevan	D.S. Guddodgi
2011-2012	Not Submitted	-	3722224
2012-2013	Not Submitted	542525	4618370
2013-2014	Not Submitted	548141	5190740
2014-2015	Not Submitted	590972	-
Total		1681638	13531334
Average		560546	4510444.67
10 % of Average Income(Penalty Amount)		56055	451044

¶349

Year	Turnover /Income during the Year (Rs. inCrores)
2011-2012	5388.32
2012-2013	7145.82
2013-2014	9354.76
Total	21888.9
Average	7296.3
1% of Average Turnover (PenaltyAmount)	72.96

¶353

Year	Amit Kumar Dhiman (in Rupees)	Nishant Ajmera (in Rupees)
2012-2013	417044	598996
2013-2014	561831	920489
2014-2015	556370	998367
Total	1535245	2517852
Average	511748	839284
1% of Average	5117	8393
Income(PenaltyAmount)

M/s Maruti & Company v. Karnataka Chemists & Druggists Association & Others

Case brief

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M/s Maruti & Company v. Karnataka Chemists & Druggists Association & Others

Case brief

What is this about?

What did the court decide?

What the court decided

Issues for consideration

Statutes considered

Parties & counsel

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