The Competition Appellate Tribunal (CAT) issued the final verdict on the long pending restrictive trade practice dispute between two trade organisations upholding the interim verdict of the Monopolies and Restrictive Trade Practices Commission (MRTPC) in favour of the complainant, the Tamil Nadu Pharmaceuticals Distributors Association (TNPDA).
The CAT's order was on a petition filed by the TNPDA in the MRTPC, New Delhi, in July 2005, against the trader's organisations - the TNCDA and its parent body, All India Organisation of Chemists & Druggists (AIOCD) – industry organisations, the Indian Drug Manufacturers Association (IDMA), the Pharmaceuticals & Allied Manufacturers & Distributors Association Ltd. (PAMDAL), and three pharma companies for allegedly denying business to the TNPDA members.
The interim order by the MRTPC issued on September 2, 2005, disposed the dispute by asking the opposite parties not to indulge in restrictive and discriminatory trade practices harming the interests of the consumer.
The CAT, a statutory body to examine the appeals on decision passed by the Competition Commission of India (CCI) which now holds the power of MRTPC, in its oral order issued on January 18, 2010, details that the interim order in 2005 disposing of the application under Section 12-A of the Monopolies and Restrictive Trade Practices Act, 1969, has decided the basic issues virtually. Though the matter was posted for the cross-examination of the complainant's witness, the CAT disposed the case due to this reason.
“We dispose of these proceedings making the said order absolute and binding on the parties,” said the order issued by the Coram consisting Dr Justice Arijit Pasayat as chairman and Rahul Sarin and Pravin Tripathi as members.
The interim order of MRTPC, in 2005, says that “TCDA and AIOCD should not issue any literature or communication to its members and pharmaceutical manufacturers by way of circulars, leaflets, pamphlets, trade notices and directives including oral instructions etc. to any person including wholesalers and retailers and producers of pharmaceutical products, with the intention of discouraging or preventing them from dealing with the members of the complainant association.”
“Further, these trade bodies should not make disparaging remarks about the prices at which the members of TNPDA sell pharmaceutical products and should not engage in any practice which has the effect of impeding, restricting or limiting the free supply of medicines between the manufacturers, wholesalers and retailers of pharma products,” added the verdict. The commission also directed IDMA and PAMDAL not to act on instructions of TNCDA and AIOCD to stop supply of pharmaceutical products to the members of TNPDA who do not obtain consent from the TNCDA and AIOCD and its affiliate members.
TNPDA approached the court under Section 33(1) and 37 read with Section 2(o) of the MRTPC Act 1969, alleging adoption of restrictive trade practices by the respondents that have the effect of distorting competition and cited various circulars, communication and trade literature issued to the manufacturers to this effect by TNCDA and AIOCD.
The TNPDA and its lately formed national body, the All India Chemists and Distributors Federation (AICDF), has filed a number of petitions against pharma companies for alleged violation of the interim order after September 2005. The final order will strengthen the association's move against the restrictive trade practices in the pharmaceutical trade sector hereon, said Prem Ranka, general secretary, AICDF and a leader of TNPDA.