1. BACKGROUND

1.1 This case was initiated on a complaint filed by Varca Druggist & Chemist through its proprietor Mr Hemant Pai Angle and two other proprietors of pharmaceutical drugs and medicines firms (hereinafter referred to as "Informants"), before the Director General (Investigation & Registrations), Monopolies & Restrictive Trade Practices Commission (hereinafter referred to as "DGIR, MRTPC")alleging that the Opposite Party, namely, Chemist & Druggist Association, Goa (hereinafter referred to as "CDAG" or "Association") is indulging into restrictive practices.

1.2 The Informants have claimed that they are members of CDAG which has been formed by chemists, druggists, distributors, stockists and retailers of various pharmaceutical companies in Goa.

1.3 The allegations made by the Informants in the complaint/information are summarized as below:

(i) CDAG has formed various guidelines, which its members are bound to abide. The said guidelines were formed by the members of the CDAG for the benefit of its members so that the business of stocking, whole selling and retailing could be smoothly facilitated among its members. However over a period of time due to the unfair practices of some of the members of its Executive Committee, CDAG has become a monopolistic body and has started practicing certain restrictive trade practices.

(ii) As per the normal practices, whenever a new pharmaceutical company establishes its industry in Goa, or is interested in distributing its products in Goa, it has to appoint stockist and wholesalers for the various regions as per its requirements. These stockist/wholesalers then sell these medicines to the retailers who possess a drug license. However, as per the CDAG guidelines, the CDAG has not only directed but also forced all such companies to appoint their stockist and wholesalers only from those individuals and firms, who are members of the CDAG, thus, thus, making it very clear that no person or firm who is not a member of the CDAG is eligible for being appointed as the stockist or wholesaler of such a company.

(iii) Furthermore, even when such a company wishes to appoint stockist and retailers from the members of the CDAG, it is insisted and directed that no such stockist or wholesaler could be appointed unless they receive a 'No Objection Certificate' from the CDAG.

(iv) The company desirous to appoint a third wholesaler or stockist has to fulfill the conditions placed by the CDAG that the sale of the previous stockists has to be above Rs. 2 lakh per month. The conditions further go on to restrict the company from appointing the 4th stockist till the sale exceeds Rs. 4 lakh per month. Similarly, only if the average sale crosses Rs. 6 lakh per month then the company can apply to the CDAG for appointment of their 5th stockist.

(v) The guidelines laid down by CDAG do not permit appointing more than five stockists by any pharmaceutical company.

(vi) A committee has been formed by CDAG which has recommended huge increase in the above mentioned slabs without taking retailers into confidence. The retailers and the wholesalers together form this association. The slab of appointment of stockist now starts from Rs. 6 lakh and ends at Rs. 40 lakh for a 5th stockist which totally extinguishes the chances of small wholesalers who could get a offer letter of a particular company to be its stockist as the CDAG bars any new appointment even though the company feels the need.

(vii) The company is restricted to appoint another stockist for one year after it appoints a stockist, even if the company feels the need.

(viii) It has also been the practice of the CDAG that even in cases where the 2 stockists have to be appointed, 'No Objection' by the CDAG is given only for one stockist, and the reason for such an action cannot be questioned by any member of the CDAG or the pharmaceutical company. But earlier, two stockists, who were on their good books, have been appointed.

(ix) As per the market trends in the pharmaceutic