COMPAT, by its order dated January 13, 2016, has set-aside the penalty imposed by the CCI on HPCDA and ordered re-investigation into allegations of cartelisation by the HPCDA.

The case was filed by Rohit Medical Store against HPCDA alleging that pharmaceutical companies were not appointing stockists in the absence of NOC from HPCDA, charging of product information charges before introduction of new medicines in the market, etc.

One of the defences that HPCDA took before the CCI was that the DG had violated principles of natural justice in so far as he had relied on allegedly forged and fabricated documents without providing an opportunity to the HPCDA to cross-examine the Informant. It was alleged that despite the request for cross-examination by the OPs, the DG himself cross-examined the witness, thus posing himself as the Informant, pleader and judge all at the same time. Another plea taken by the HPCDA was that the DG had relied upon his personal knowledge for recording a finding against them and this was contrary to the basic principle that 'no one should be a judge in his own cause'.

The COMPAT noted that though the Commission did very briefly noticed some of the objections raised by the appellants but did not at all deal with the specific pleas raised by the appellants that the investigation conducted by the DG was vitiated due to violation of the principles of natural justice and the findings recorded by him were perverse. The COMPAT considered the allegation of violation of principles of natural justice as quite serious and merited further investigation by the DG for affording cross- examination of the Informant. The CCI’s failure to adopt the course had resulted in grave miscarriage of justice.

In light of the above, the COMPAT directed the DG to conduct fresh investigation into the matter with a further direction that the CCI shall pass fresh orders after giving opportunity to the parties to file their objections/submissions in respect of the findings which may be recorded by the DG and hearing their advocates/representatives.

(Source: COMPAT: Order dated January13, 2016. For full text see COMPAT website)