BLISS CHEMICALS AND PHARMACEUTICALS I LTD Vs. STATE

JUDGEMENT

(1.) This shall dispose of the Notice of Enquiry (NOE) issued on 30th November, 1992 by the Commission to Bliss Chemicals and Pharmaceuticals (I) Ltd. (respondent 1 hereafter) and Bijay Pharmaceuticals Agencies (respondent 2 hereinafter) charging them of having indulged in certain restrictive trade practices falling within me provisions of Sec.33 (1) (a ). Sec.33 (1) (e) and Sec.33 (1) (f) of MRTP Act, 1969. The enquiry was triggered by a complaint received from Central Medical Hall, Chemists and Druggists, Wholesalers and Retailers, Rourkela (complainant hereafter) addressed to this Commission. On receipt of the complaint, the Director General (Investigation and Registration) (DG for brief) was directed to make an investigation and report to the Commission. The DG submitted his investigation report based on which the NOE has been issued against the two respondents mentioned above. Briefly, the facts are as follows :

(2.) Respondent 1 is a Company engaged in the manufacture of various chemicals and pharmaceuticals and in particular the formulation called "today" a contraceptive used for family planning. It has a marketing system of supplying its products to retailers through State- wise distributors, and District-wise stockists respondent 2 is one of the distributors of respondent 1. According to the complainant namely Central Medical Hall it was appointed as a stockist of respondent 1 for marketing its product "today" in the town of Rourkela and it was to get a margin or discount of 10 percent of the value of the product, respondent 2 as the distributor of respondent 1 was advised to supply the products of respondent 1 to the complainant. The complainant on requesting for the discount of 10 percent was told by respondent 2 that the discount would only be percent for the purchase of one case of the product "today" and would be 10 percent on purchase of three cases. Furthermore, respondent 2 demanded full payment from the stockist complainant on the ground that respondent 2 had to pay the price of the products in advance to respondent for the supply of goods in question. Aggrieved by this attitude of respondent 2, the complainant approached respondent 1 who refused to intervene pointing out that the action of the distributor (respondent 2) was in accordance with the procedure laid down by respondent 1.

(3.) The DG in his report has stated that when he referred the matter to respondent 1, the latter had informed that respondent 2 had been granting differential discounts without any authority from it and that consequently respondent had issued a circular to respondent 2 to stop the practice of differential discounts. The DC has stated that after the complainant has been appointed as a stockist it was justified in claiming the margin of 10 percent as indicated in the price list issued by respondent 1 and respondent 1 and respondent 2 "had no business not to pay this discount". The attitude of respondent 2 in offering only 5 percent discount against the full discount, of 10 percent is "highly objectionable". Even if respondent 1 had subsequently issued instructions to respondent 2 regarding the discounts, it does not take away the merit of the allegation at the particular point of time when differential discounts were implemented.