Delhi High Court Dismisses Writ Petition Filed by Abbott Healthcare

On November 13, 2018, the Delhi High Court (‘DHC’) dismissed the writ petition filed by Abbott Healthcare Private Limited (‘Abbott’), challenging the order dated July 5, 2018 passed under Section 26(1) of the Act by CCI.[1] In this order, CCI had directed investigation into the anti-competitive agreements between four leading pharmaceutical companies, namely, Novartis India, Abbott, USV Limited and Emcure Pharmaceuticals Limited. Abbott also challenged the CCI order dated October 29, 2018 rejecting Abbott’s application for review and recall of the aforesaid order.

The information regarding the alleged contravention was received by CCI pursuant to: (i) a letter dated March 22, 2017 from the National Pharmaceutical Pricing Authority, Department of Pharmaceuticals (‘NPPA’); and (ii) an anonymous e-mail purportedly sent by one of the employees of Abbott (‘Email’) containing another e-mail dated July 29, 2016. The Email indicated that there was an understanding to maintain the price of drugs across the country.

According to Abbott, the Email is forged and the data provided by NPCC is inaccurate. Abbott challenged the CCI’s order on the ground that CCI could not have issued the order without employing appropriate tools to test the veracity of the contents of the Email.

While dismissing Abbott’s writ petition, DHC referred to Competition Commission of India v Steel Authority of India Limited[2]. Relying on this decision, DHC held that an order passed by CCI under Section 26(1) of the Act is essentially an administrative order, akin to a direction from one wing of the department to another. The decision further explains that an order under Section 26(1) of the Act passed by CCI can at best direct investigation and does not amount to an adjudicatory function.

The DHC noted CCI’s powers under the following provisions: (i) under Section 36 of the Act, the CCI has powers of a civil court to try matters before it including discovery, production of documents and receiving evidence on affidavit; and (ii) under Regulation 17 and Regulations 41 and 44 of the CCI (General) Regulations, 2009 (‘General Regulations’), the CCI has power and jurisdiction to take evidence and call for information in accordance with provisions of the Act. However, while dismissing the writ petition, DHC rejected the contention that it was incumbent upon CCI to take evidence under Section 36(2) of the Act or Regulation 41 of the Regulations before issuing an order under Section 26(1) of the Act. It held that a decision under Section 26(1) of the Act is only a preparatory measure which precedes an inquiry.

[1] W.P. (C) No. 12129 of 2018.
[2] (2010) 10 SCC 744.

Published In:Inter Alia Special Edition Competition Law November 2018 [ English
Date: November 30, 2018