TC: 29

Before
THE HONBLE SUPREME COURT OF INDIA
In the Matter of
SPECIAL LEAVE PETITION (CIVIL) (________/ 2015)

ZAYER INDIA

APPELLANT

v.
KIPLA AND ANR.

RESPONDENTS

MEMORANDUM FOR THE RESPONDENTS

-Table of Contents-

-Respondents-

TABLE
TABLE OF CONTENTS

OF

CONTENTS

II

STATEMENT OF JURISDICTION

VIII

STATEMENT OF FACTS

IX

STATEMENT OF ISSUES

XII

SUMMARY OF PLEADINGS

XIII

I
INDEX OF AUTHORITIES

PLEADINGS AND AUTHORITIES

I.

THE INSTANT SPECIAL LEAVE PETITION IS NOT MAINTAINABLE.

A. THAT THE

B. THAT THE DECISION OF THE COMPAT IS NOT PATENTLY ERRONEOUS.- -

REMEDY

II.
A.

APPELLANT HAS NOT EXHAUSTED THE AVAILABLE ALTERNATE EFFICACIOUS

THE DECISION OF THE HONBLE HIGH COURT SHOULD BE UPHELD.

THAT THE COMPATS ORDER ONLY INCIDENTALLY ENFORCES FUNDAMENTAL RIGHTS.
-

--

ARGUENDO: THAT THE COMPAT HAS THE JURISDICTION TO ENFORCE FUNDAMENTAL

RIGHTS.THAT THE APPELLANTS RIGHT UNDER ARTICLE 19 (1) (G) HAS NOT BEEN VIOLATED.
1. THAT JUDICIAL DECISION CANNOT VIOLATE YOUR FUNDAMENTAL RIGHTS.2. THAT ZAYERS REFUSAL TO LICENSE IS NOT JUSTIFIABLE UNDER ARTICLE 19 (1) (G).

B.
.

C.

3. THAT THE RIGHT TO HEALTH OF THE PUBLIC OVERRIDES THE RIGHT TO TRADE AND
PROFESSION. ART. 21 V. ART. 19(1)(G)
THAT ZAYERS EFFORT TO INJUNCT KIPLA AMOUNTS TO ABUSE OF DOMINANT POSITION.

PRAYER

MEMORANDUM for THE RESPONDENTSi

XIV

-Statement of Jurisdiction-

-Respondents-

INDEX OF AUTHORITIES
CASES CITED
S. NO.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.

CASE NAME
A.R. Antulay v. R.S. Nayak [1988 (2) SCC 602.
A.V. Venkateswaran, Collector of Customs, Bombay v. Ramchand
Sobhraj Wadhwani and Anr., AIR 1961 SC 1506.
All Delhi Rickshaw Union v. Municipal Corpn., AIR 1987 SC 648 (para
5).
Amar Singhji v. State of Rajasthan [AIR 1955 SC 504].
Amulya Chandra Paul vs The State, 1991 (1) SCC 181.
Arunalchalam v. Sethuratnam, AIR 1979 SC 1284.
Ashok Nagar Welfare Association v. R.K. Sharma, AIR 2002 SC 335.
Aspen Ski, 472 U.S. 585 (1985).
Babu Singh Bains v. Union of India [1996 (6) SCC 565].
Babulal Parate v. State Of Maharashtra And Others, AIR 1961 SC 884.
Baldota Brothers v. Libra Mining Works, AIR 1961 SC 100.
Bandhua Mukti Morcha v. Union of India, 1984 SCR (2) 67.
Beant Singh v. UOI AIR 1977 SC 388.
Bengal Chemical and Pharmaceutical Works Ltd. v. Employees of
Bengal Chemical and Pharmaceutical Works Ltd., AIR 1959 SC 633.
Bijili Cotton Mills Pvt. Ltd. v. Industrial Tribunal AIR 1972 SC 1903.
Cf. Raruha Singh v. Achal Singh, AIR 1961 SC 1097.
Ch. Tika Ramji & Others, Etc vs The State Of Uttar Pradesh & Others,
AIR 1956 SC 676.
City of Anaheim, 955 F.2d at 1379.
Commercial Solvents, [1974] ECR 223.
Consumer Education and Research Centre v. Union of India and Life
Insurance Corporation v. Consumer Education and Research Centre,
1995 SCC (3) 42.
Cooverjee v. Excise Commissioner (1954) SCR 873.
Delhi Cloth and General Mills Co. Ltd. v. Union of India [(1983) 4 SCC
166].
EC Commission v. Microsoft, COMP/C-3/37.792.
Entitlement Kendera v. State of U.P, AIR 1988 SC 2187.
Excel wear v. Union of India, (1978) 4 SCC 224.
Express Newspapers v. UOI AIR 1958 SC 578.
Glass Chatons v. UOI AIR 1961 SC 1514.
Gurbachan Singh v. Union of India [1996 (3) SCC 117].
Harakchand Ratanchand Banthia v. Union Of India And Ors, AIR 1970
SC 1453 (1463,1464).
Harakchand v. UOI, AIR 1970 SC 1453.
-MEMORANDUM FOR THE RESPONDENTSii

PAGE NO.

-Statement of Jurisdiction31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.

-Respondents-

Hari Vishnu Kamath v. Ahmad Ishaque AIR 1955 SC 233, 243-44.

HT Media Limited v. Super Cassettes Industries Limited,
2014CompLR129 (CCI).
In Re: M/s GHCL Limited and M/s Coal India Limited, Case No. 08 of
2014.
Indian Handicrafts Emporium and Ors. v. Union of India and Ors., AIR
1987 SC 532.
Indian Performing Rights Society v. Eastern Indian Motion Pictures
Association, (1977) 2 SCC 820.
In-re Taraorimandi, (1994)2 CTJ 129 (MRTPC).
Intel Cmp., FTC Dkt. No. 9288 (June 8, 1998) (Complaint).
J.B. Chopra v. Union of India, AIR 1987 SC 357.
Jai Singh vs. Khimi Bhiklu1978 Sim LC 330(351): ILR (1978) HP 355
(DB).
Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai, AIR
2004 SC 1815.
JK Industries Ltd. v. Chief Inspector of Factories, (1996) 6 SCC 665.
K.M. Shanmugam v. SRVS (P) Ltd. and others, AIR 1963 SC 1626.
Kartar Singh v. State Of Punjab (1994) 3 SCC 569.
Kashi Prasad vs State AIR 1950 All 732.
Kesavananda Bharati v. State of Kerela, (1973) 4 SCC 225.
Khoday Distilleries Ltd. v. Registrar General, Supreme Court of India
[1996 (3) SCC 114].
Krishna Swami v. Union of India [1992 (4) SCC 605].
Krishnamurthy v. Venkatesivaran, AIR 1952 Mad 95.
L. Chandra Kumar v. Union of India, AIR 1997 SC 1125.
Lambodar Panigrahi vs Civil Judge, 1996 II OLR 319.
LES LABORATOIRES SERVIER v. APOTEX INC [2012] EWCA Civ.
593.
M.M. Yaragatti vs Vasant and Ors., ILR (1987) Kant 3069.
Madras Bar Association v. Union of India & Anr., CASE (C) NO. 150
OF 2006.
Magill ITP, BBC and RTE v. Commission, Cases C241/91 and C242/91
(1995), ECR I-743.
Management of the Hindustan Commercial Bank Ltd., Kanpur v.
Bhagwan Dass, AIR 1965 SC 1142.
Mangalbhai and ors. v. Radhey Shyam, : (1992) 3 SCC 448.
Manish Goel v. Rohini Goel, AIR 2010 SC 1099.
MCI v AT&T , 708 F.2d 1081, at 1132-33.
MCX v. NSE, 2011CompLR0129 (CCI).
Michelin v Commission, [1983] ECR 3461.
Mid-South Grizzlies v. Nat'l Football League, 550 F. Supp. 558, 570;
See also, United States v. Terminal Railroad Ass'n, 224 U.S. 383 (1912),
Intel Cmp., FTC Dkt. No. 9288 (June 8, 1998) (Complaint).
-MEMORANDUM FOR THE RESPONDENTSiii

-Statement of Jurisdiction62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
84.
85.
86.
87.
88.
89.
90.
91.
92.

-Respondents-

Mid-South Grizzlies v. Nat'l Football League, 550 F. Supp. 558, 570.

Minerca Mills v. Union of India, AIR (1980) SC 1789, at 1847.
Mohd. Aslam v. Union of India [1996 (2) SCC 749].
Mt. Parsini w/o Joginder Singh v. Wasan Singh Labh Singh and Anr.,
AIR1951 Pepsu 59.
Mulk Raj v. New Kenilworth Hotels Ltd., AIR 2000 SC 1917.
N.D. Jayal & Anr. v. UOI & Ors. (2004) 9 SCC 362.
Namit Sharma v. Union of India, (2013) 1 SCC 745.
Nanjappa Goundan vs Peria Ramaswami Goundan And Ors. AIR 1951
Bom 459.
Narendra v. UOI (1960) 2 SCR 375; UOI v. Bhanmal, (1960) 2 SCR
627.
Naresh Shridhar Mirajkar v. State of Maharashtra and also in A.R.
Antulay v. R.S. Nayak [1988 (2) SCC 602.
Narpat Singh v. Jaipur Development Authority, (2002) 4 SCC 666.
Nirma Ltd. v. Lurgi Lentijes Energietiknik GNBH, AIR 2002 SC 3695.
Northern Plastics Ltd. v. Collector of Customs & Central Excise, (2001)
SCC 545.
Olga Tellis v. Bombay Municipal Council, AIR (1985) 180 SCR Supl. 2,
51, at 73.
Onkarlal Nandlal v. State of Rajasthan, (1985) 4 SCC 404.
P. Ashokan v. Union of India [1998 (3) SCC 56.
Parbhani Transport Coop. Society Ltd. v. Regional Transport Authority
(7 judge bench) [AIR (1960) SC 801]; Budhan Chaudhary v. State of
Bihar(7 judge bench) [AIR 1955 SC 191].
Parmeshwar Deen Patel vs Snehlata And Anr. 2003 (2) Mad LJ 701.
Penu Balakrishna Iyer v. Ariya M. Ramaswami Iyer, 1964 SCR (7) 49.
Pioneer Paper Box factory v. Thakurdevi Shriniwas, (1970) 2 SCC 390.
Prem Chand Garg v. Excise Commissioner (7 judge bench) [AIR 1963
SC 996].
Pren Singh v Custodian General, Evacuee Property, AIR 1957 SC 804.
Pritam Singh v. The State, AIR 1950 SC 169.
Prithwish Roy v. Adrish Majumdar, AIR 1952 Cal 273; AIR 1956 TravCo 19 (22) (FB).
Punjab State Electricity Board v. Ashwani Kumar, AIR (1997) 5 SCC
120.
R.K. Singh v. Union Of India And Others (1987) 2 ATC 974 (Mad)
Radha Krishna Reddy v. Satvik Drugs 1992 (1) Mad LJ 582.
Radhe Shyam v. Chhabi Nath & Jagdish Prasad v. Iqbal Kaur & Ors.
(Clubbed Petitions) CIVIL APPEAL NO.2548 OF 2009, SLP (C)
NO.25828 OF 2013 respectively.
Ramchand v. Union of India, AIR 1963 SC 563 (566).
Ramsaran v. CTO, AIR 1962 SC 1326.
Rupa Ashok Hurra v. Ashok Hurra & Anr , Writ Petition (civil) 509 of
-MEMORANDUM FOR THE RESPONDENTSiv

-Statement of Jurisdiction-

-Respondents-

1997.
Saghir Ahmed v. State of UP, AIR 1954 SC 728.
Saibal Kumar Gupta v. B. K. Sen, AIR 1961 SC 633.
Satyanarayan Laxminarayan Hegde v. Millikarjun Bhavanappa
Tirumale, AIR 190 SC 137.
96. Sea Containers and Stena Sealink, OJ [1994] L 15/8.
97. Sirpur Paper Mills v. Commissioner of Wealth Tax, AIR 1970 SC 1520.
98. Sivaranjan v. UOI, AIR 1959 SC 556.
99. Smt. Lucy R. D'Souza And Etc. Etc. vs State Of Goa And Others, AIR
1990 Bom 355 (358).
100. Smt. Ujjam Bai vs State Of Uttar Pradesh, 1962 AIR 1621.
93.
94.
95.

101. Smt. Veena Mahajan v. Govt. Of Nct Of Delhi (2007) 15 SCC 632.
102. Snowden v. Hughes, 321 U.S. 1 (1944).
103. Southern Pharmaceuticals v. State of Kerela, (1981) 4 SCC 391.
104. State of Karnataka v. Hansa Corp., AIR 1981 SC 463.
105. State of Kerala v N. M. Thomas, 1976 SCR (1) 906.
106. State of Madras v. Roq, (1952) SCR 597.
107. State of Maharashtra v. Himmatbhai AIR 1970 SC 1157.
108. State of Maharashtra v. Rao, AIR 1971 SC 1157.
109. State of Rajasthan v. G. Chawla [AIR 1959 SC 544].
110. State of U. P. v. Harish Chandra, (1996) 9 SCC 309.
111. Steel Authority of India v. CCE, (2001) 10 SCC 601.
112. Subba Rao. C.J., in I.C. GolakNath v. State of Punjab, AIR 1967 SC
1643.
113. Surinder Barmi v. Board of Control of Cricket in India, Case No.
61/2010 dated 8.2.2013.
114. Surinder Barmi v. Board of Control of Cricket in India, Case No.
61/2010 dated 8.2.2013.
115. Surya Dev Rai v. Ram Channder Rai (2003) 6 SCC 675, 695.
-MEMORANDUM FOR THE RESPONDENTSv

-Statement of Jurisdiction116.
117.
118.
119.
120.
121.
122.
123.
124.
125.
126.
127.
128.

-Respondents-

Sushilabhai's case, AIR 1992 SC 185.

Syed Yakoob v. K. S. Radhakrishnan AIR 1964 SC 477.
T C Basappa v. T. Nagappa AIR 1954 SC 440.
T.Vijayalakshmi v. Ram Lubhaya Bagga (1998) 4 SCC 117.
Tahera Khatoon (D) by LRs. v. Salambin Mohammad, (1999) 1 SCR
901.
Terminal Railroad, 224 U.S. 383 (1912).
Triveniben v. State of Gujarat 1989 1 SCC 678.
Tungabhadra Industries v. The Government of A.P., AIR 1964 SC 1372.
Ujjam bai v. State of UP, 1962 AIR 1621.
Union of India v. Kishori Lal Gupta, (1960) 1 SCR 493.
United States v. Terminal Railroad Ass'n, 224 U.S. 383 (1912).
Vijay Kumar Sharma v. State of Karnataka [(1990) 2 SCC 562].
Vishal Yadav vs State Of U.P. 1196 (1) Chand LR (Civ and Cri) 565
(568) (DB) (J&K).

STATUTES AND RULES CITED

S. No.
1.

BIBLIOGRAPHICAL INFORMATION
The Constitution of India, 1950

2.

Indian Patents Act, 1970

3.

Competition Act, 2002

4.

Delhi High Court Rules

ARTICLES REFERRED
S. NO.
1.

2.

BIBLIOGRAPHICAL INFORMATION
Competition and Regulation Issues in the Pharmaceutical Industry, available at
http://www.oecd.org/competition/sectors/1920540.pdf
Competition: Antitrust procedures in abuse of dominance, available at
http://ec.europa.eu/competition/publications/factsheets/antitrust_procedures_102_en.pd
f

-MEMORANDUM FOR THE RESPONDENTSvi

-Statement of Jurisdiction-

-Respondents-

3.

Per Commission Vice President, Joaquin Almunia, Antitrust: Commission fines

Servier for curbing entry of cheaper versions of cardiovascular medicine (Brussels, 9
July, 2014), at http://europa.eu/rapid/press-release_IP-14-799_en.htm

4.

RAMA SARMA, Commentary on Intellectual Property Laws, (1st Edn.), at p. 28.

BOOKS REFERRED
1.

HALSBURYS LAWS

OF INDIA,

COMPETITION LAW AND TRADE PRACTICES CONFLICT OF

2.

LAWS COURTS,( Vol. 10, Lexis Nexis Butterworths, New Delhi 2007).
T. RAMAPPA, COMPETITION LAW IN INDIA, POLICY, ISSUES AND DEVELOPMENTS (Second

3.

ed., Oxford University Press, 2009) (2006).

COMPETITION LAW TODAY, CONCEPTS, ISSUES,

4.

ed., Oxford University Press, 2008) (2007).

GAUTAM BANERJEE, GUIDE TO THE COMPETITION LAW, (Commercial Law Publishers

5.

(India) Pvt. Ltd., 2011).

S M DUGAR, U P MATHUR, DINESH AGNANI, PUBLISHERS EDITORS BOARD, GUIDE TO

6.

COMPETITION LAW, ( 5 ed., Vol. 2, Lexis Butterworths Wadhwa, Nagpur, 1979) (2010).
DURGA DAS BASU, COMMENTARY ON THE CONSTITUTITON OF INDIA, ( Honble Mr. Justice

AND

THE LAW IN PRACTICE, (Vinod Dhall

C.K. Thakker ed., Honble Mr. Justice S.S. Subramani ed., Honble Mr. Justice T.S. Doabia
ed., Honble Mr. Justice B.P. Banerjee ed., Vol. 5 LexisNexis Butterwoths Wadhwa, Nagpur
7.

1950) (2009).
KEVIN COATES, COMPETIITON LAW AND REGULATION OF TECHNOLOGY MARKETS, (Oxford

8.

University Press 2011).

M P JAIN, INDIAN CONSTITUTIONAL LAW (Samaraditya Pal rev., Justice Ruma Pal rev., 6

9.

ed., Vol. 2, 2010) (1962).

H. M. SEERVAI, CONSTITUIONAL LAW IN INDIA, ( Fourth ed., Vol. 1, Universal Law

Publishing Co. Pvt. Ltd. 2007) (1967).

10. DURGA DAS BASU, COMMENTARY ON THE CONSTITUTITON OF INDIA, ( Honble Mr. Justice
C.K. Thakker ed., Honble Mr. Justice S.S. Subramani ed., Honble Mr. Justice T.S. Doabia
ed., Honble Mr. Justice B.P. Banerjee ed., Vol. 2 LexisNexis Butterwoths Wadhwa, Nagpur
1950) (2009).
11. ABIR ROY, JAYANT KUKMAR, COMPETITION LAW IN INDIA, (Second ed., Eastern Law House,
2014).

-MEMORANDUM FOR THE RESPONDENTSvii

-Statement of Jurisdiction12. MANOHAR

AND

-Respondents-

CHITALEY, THE AIR MANUAL, CIVIL

AND

CRIMINAL, (6th ed.,Vol. 10, All

India Reporter Pvt. Ltd. Nagpur 2004).

DATABASES REFERRED

http://www.manupatra.com
http://www.westlawindia.com
https://www.scconline.in/default.aspx

STATEMENT OF JURISDICTION
The counsels on behalf of the Respondents have endorsed their pleading in response to the
petition filed by the Petitioners under the aegis of article 1361 of the Constitution of India.
The respondents would humbly contest the maintainability of the petition invoked under
the aegis of article 136 of the Constitution of India in the first issue.

Article 136 of the Constitution of India, Special leave to appeal by the Supreme Court: (1) Notwithstanding
anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment,
decree, determination, sentence or order in any cause or matter passed or made by any Court or tribunal in the
territory of India (2) Nothing in clause (1) shall apply to any judgment, determination, sentence or order passed or
made by any Court or tribunal constituted by or under any law relating to the Armed Forces.

-MEMORANDUM FOR THE RESPONDENTSviii

-Statement of Facts-

-Respondents-

STATEMENT OF FACTS
BACKGROUND
An epidemic like situation was triggered as soon as the vicious haemorrhagic fever Lebola
broke out in December, 2013. Almost 30,000 patients were diagnosed with the Lebola virus,
12,000 of them succumbed to this deadly virus. In India alone, there are approximately 2500
confirmed patients suffering from Lebola.

THE DRUG
In March of 2014, Zayer Inc. developed a drug LebinX, the only known cure for Lebola virus
and patented the same in USA. The USA government classified LebinX as an orphan drug and
reimbursed 50% of the R&D costs. Zayer Inc. patented the same formulation in India in October
2014 with the help of its wholly owned subsidiary Zayer India. LebinX was sold at INR
36,000 for 60 tablets per month.

LICENCE
Kipla Pvt. Ltd. one of Indias largest pharmaceutical brands, sought to enter into a licencing
agreement with Zayer Inc. with an offer to manufacture and sell LebinX at a price of INR 600 for
the same dosage of 60 tablets. But the negotiations couldnt take off as a result of which the
licence was refused by Zayer India.
THE INFRINGING DRUG & SUIT
In February 2015, Kipla introduced a generic version of LebinX at a price of INR 600 for 60
tablets and sought to patent its formulation on the grounds that their drug, Lebocin possessed
therapeutic efficacy over the existing drugs in the market. Zayer India, was quick in moving to
the High Court in an original suit seeking an interim injunction and protection against
infringement of its patent.
BEFORE CCI
Aggrieved by the suit, Kipla moved the Competition Commission of India (CCI) stating that
Zayer Indias refusal to license and subsequent effort to injunct Kipla from manufacturing and
-MEMORANDUM FOR THE RESPONDENTSix

-Statement of Facts-

-Respondents-

selling amounted to a gross abuse of the dominant position considering the increase in the
number of deaths due to Lebola. The CCI however did not find a prima facie case against Zayer
India. Kipla then moved the Competition Appellate Tribunal (COMPAT) in an appeal arguing
that CCI should have recognised the impact on public health as a result of the abuse of dominant
position exercised by Zayer India.
COMPATS ORDER
The COMPAT set aside CCIs order citing that there were immense social costs in allowing
Zayer India to violate its obligations towards public health enshrined under Article 21 of the
Constitution. It noted that if Kipla is injuncted even as a willing licensee, the public will then be
solely and absolutely dependent on Zayer India for access to life-saving drugs, and this fall
squarely within the prohibition that Section 4 of the Competition Act.
BEFORE THE HONBLE HIGH COURT OF DELHI
Zayer India moved the Delhi High Court under Article 226 challenging the order of COMPAT on
a number of grounds, chief amongst them being the fact that COMPATs order was a nullity for
lack of jurisdiction and the violation of the Fundamental Right under Article 19(1)(g). The High
Court dismissed the petition citing the cost to public health as irreparable against the monetary
loss of Zayer India.
SPECIAL LEAVE PETITION BEFORE THE HONBLE SUPREME COURT
Zayer India sought Special Leave to appeal against the order of the Honble Delhi High Court.
When the SLP came up for admission the Honble Apex Court issued notices to Kipla Pvt. Ltd.
and also to the Attorney General to present the views of the Union Government on the instant
matter. The special leave has now been listed for final disposal.

-MEMORANDUM FOR THE RESPONDENTSx

-Summary of Pleadings-

-Respondents-

STATEMENT OF ISSUES
The following issues are presented before the Honble Supreme Court of India:I.

WHETHER THE INSTANT SPECIAL LEAVE PETITION IS MAINTAINABLE OR NOT.

II.

WHETHER THE DECISION OF THE HONBLE HIGH COURT SHOULD BE UPHELD OR NOT.

-MEMORANDUM FOR THE RESPONDENTSxi

-Summary of Pleadings-

-Respondents-

SUMMARY OF PLEADINGS

I.

The Respondents most humbly submit before the Honble Supreme Court that the Special
Leave Petition is not maintainable since it purports to bypass the alternate remedies
available to the appellant i.e. under the letters patent appeal and decision is not patently
erroneous as it is based on sound legal principles and it is the settled principle of law that
under article 226 the court only looks as to the patent error if any, in this case since it dealt
in merits, which clearly inclines that there might be error but not patently erroneous.

II. The Respondents most humbly contend before the Honble Supreme Court that the decision
of Honble High Court is correct as COMPAT can enforce fundamental rights, however in
the present case it only incidentally deals with fundamental rights issue, the appellants right
under article 19(1)(g) has not been violated as judicial decisions cannot violate fundamental
rights, further right to health of public under article 21 would override right to trade and
profession under article 19 of an individual and the latter cannot be said to be infringed for
protection of the former and also as right to refuse to license is not enshrined under article
19(1)(g).

-MEMORANDUM FOR THE RESPONDENTSxii

-Pleadings and Authorities-

- Respondents-

PLEADINGS AND AUTHORITIES

I.
1.

THE INSTANT SPECIAL LEAVE PETITION IS NOT MAINTAINABLE.

It is most humbly submitted by the respondents that the instant Special Leave Petition (SLP)
does not stand the test laid down by this Honble Court in a myriad cases for the exercise of

2.

its extraordinary jurisdiction under Art. 136.

The sustainability of this SLP is challenged on the grounds that, firstly, it short-circuits the
ordinary judicial process by purporting to bypass the alternative remedies available 2 [A] and

3.

secondly, that the decision of the Honble Delhi High Court is not patently erroneous3 [B].
It is most humbly submitted before this Court that the objection raised by the respondents
regarding the maintainability of the instant SLP is legitimate since grant of leave is not
conclusive4 since the propriety of the same can be questioned at the time of hearing of
appeal and may be dismissed without going into the merits if the Honble Court finds that

4.

there was no proper case for granting special leave in the first place.5
In this regard, strong reliance is placed on the case Baldota Brothers v. Libra Mining Works6
wherein this Court eloquently held that,
There is no distinction in the scope of the exercise of power under Art. 136
of the Constitution of India at the stage of the application for special leave
and the stage where the appeal is finally disposed off and it is open to the
Court to question the propriety of the leave granted by it even at the time of
hearing of the appeal.

Manish Goel v. Rohini Goel, AIR 2010 SC 1099.

Pioneer Paper Box factory v. Thakurdevi Shriniwas, (1970) 2 SCC 390.
4
DURGA DAS BASU, COMMENTS ON THE CONSTITUTION OF INDIA 5776 (8th Edition, Vol. 6, Wadhwa and Company,
2007) (1950).
5
Bengal Chemical and Pharmaceutical Works Ltd. v. Employees of Bengal Chemical and Pharmaceutical Works
Ltd., AIR 1959 SC 633.
6
Baldota Brothers v. Libra Mining Works, AIR 1961 SC 100; See also Saibal Kumar Gupta v. B. K. Sen, AIR 1961
SC 633; Ashok Nagar Welfare Association v. R.K. Sharma, AIR 2002 SC 335; Tahera Khatoon (D) by LRs. v.
Salambin Mohammad, (1999) 1 SCR 901.
3

-MEMORANDUM FOR THE RESPONDENTS1

-Pleadings and Authorities5.

- Respondents-

Hence it is most humbly submitted before the Honble Supreme Court that a Special Leave

once granted can be subsequently revoked.7

A. THE APPELLANT HAS NOT EXHAUSTED

THE AVAILABLE ALTERNATE EFFICACIOUS

REMEDY.

6.

The respondents most humbly submit that Art. 136 of the Constitution of India confers a
discretionary power of the widest amplitude on the Honble Supreme Court 8 and vests in it a

7.

plenary jurisdiction which must be sparingly used.9

A constitutional bench of the Honble Apex Court in the case of Pritam Singh v. The State 10
emphasized upon adopting a uniform standard for the exercise of the extraordinary
jurisdiction under Art. 136. The powers under Art. 136 of the Constitution are
extraordinary and must be used in exceptional cases on well-known principles. 11 One

8.

such principle for rejection of an SLP is the availability of an alternative efficacious remedy.
As a matter of course, SLPs seeking to bypass alternative remedies have been meted out

9.

with the Honble Supreme Courts strict reprimand and rejection.12

In the instant matter, the appellant has preferred an SLP directly from the order of the Delhi
High Court without resorting to the letters patent appeal which was available to him as an
alternative forum. Matters pertaining to issue of any directions, orders or writs in the nature
of Mandamus, prohibition, quo-warranto or certiorari for the enforcement of fundamental
rights conferred by Part III of the Constitution of India or for any other purpose are presided
over by a single judge of the Honble Delhi High Court. 13 It is a settled proposition that a
letters patent appeal from a petition under Article 226 is maintainable before a division

Tungabhadra Industries v. The Government of A.P., AIR 1964 SC 1372; See also Penu Balakrishna Iyer v. Ariya
M. Ramaswami Iyer, 1964 SCR (7) 49; Cf. Raruha Singh v. Achal Singh, AIR 1961 SC 1097.
8
Narpat Singh v. Jaipur Development Authority, (2002) 4 SCC 666.
9
Arunalchalam v. Sethuratnam, AIR 1979 SC 1284.
10
Pritam Singh v. The State, AIR 1950 SC 169.
11
Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai, AIR 2004 SC 1815.
12
State of U. P. v. Harish Chandra, (1996) 9 SCC 309; See also Mulk Raj v. New Kenilworth Hotels Ltd., AIR 2000
SC 1917.
13
Part B, Jurisdiction of a Single Judge and of Benches of the Court, Rule 1 (xviii) (a).

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- Respondents-

bench.14 However, such a remedy was conveniently ignored by the appellant who has
directly approached the Honble Supreme Court seeking the exercise of its extraordinary
remedy under Article 136.
10. It is most humbly submitted by the respondents that the Honble Supreme Court has
quashed the leave granted on the ground that an appeal lay to the appellate bench of the
High Court and observed, This Court should not have given special leave and thereby
short-circuited the legal procedure prescribed. 15
11. Similarly, a Constitutional bench of the Honble Supreme Court revoked the special leave
since the appellant had not availed the alternate remedy.16 In the instant case, the appellant
did not seek the alternate remedies available to him. Application of the Honble Supreme
Courts rationale in the instant case would entail that the instant petition is liable to be
quashed.
12. The instant SLP filed by the petitioner purports to circumvent the ordinary alternative
remedies available to him and directly seeks to invoke the extraordinary jurisdiction of the
Honble Apex Court.
13. It has been unequivocally held on multiple occasions that a petition under Art. 136 shall not
be entertained when the petitioner has not resorted to the jurisdiction of the Honble High
Courts first.17
14. Therefore, the respondents most humbly submit before the Honble Supreme Court that
keeping in view the precedents laid down by the Apex Court, 18 the petitioners sheer failure
to exhaust the available alternative remedies may render the current SLP non maintainable
B. THAT

THE DECISION OF THE

COMPAT

IS NOT PATENTLY ERRONEOUS.

14

Mangalbhai and ors. v. Radhey Shyam, (1992) 3 SCC 448, Sushilabhai's case, AIR 1992 SC 185.
Union of India v. Kishori Lal Gupta, (1960) 1 SCR 493.
16
Management of the Hindustan Commercial Bank Ltd., Kanpur v. Bhagwan Dass, AIR 1965 SC 1142.
17
Ramsaran v. CTO, AIR 1962 SC 1326.
18
Onkarlal Nandlal v. State of Rajasthan, (1985) 4 SCC 404; See also Sirpur Paper Mills v. Commissioner of
Wealth Tax, AIR 1970 SC 1520; Steel Authority of India v. CCE, (2001) 10 SCC 601; Nirma Ltd. v. Lurgi
Lentijes Energietiknik GNBH, AIR 2002 SC 3695; Northern Plastics Ltd. v. Collector of Customs & Central
Excise, (2001) SCC 545; Punjab State Electricity Board v. Ashwani Kumar, AIR (1997) 5 SCC 120.
15

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- Respondents-

15. It is the submission of the respondents that the instant SLP preferred against the decision of
the Honble Delhi High Court may not be held maintainable since there exists no manifest
or grave error on the face of the decision of the COMPAT to have warranted the interference
of the Honble High Court under Article 226.
16. In the present case, the appellant had moved the Delhi High Court, under Article 226
praying that the order of the COMPAT be declared a nullity for lack of jurisdiction to
enforce fundamental rights and for violation of the fundamental right under Article 19 (1)
(g).19 However, the High Court refused to interfere with COMPATs order, leading to the
instant SLP.
17. It is humbly asserted that the High Courts non-interference is justified in the light of the
settled principle of law that intervention under Article 226 is called for only when the
judgment of the subordinate court is fraught with manifest error visible on the face of the
records. To attract the writ of certiorari even an error of law is not sufficient, it must be one
which is manifest or patent on the face of the record. 20 The writ of certiorari is to be
exercised with great caution and not as a matter of course.21
18. The respondents contend that the decision of the COMPAT is quintessential and far from
being erroneous, let alone being patently wrong. Thus, in absence of any glaring error, the
High Court correctly decided not to interfere. It is only in the case of a patent or self-evident
error of law which can be corrected by certiorari even a mere wrong decision cannot be
corrected by it.22

19

Moot Proposition, 8.
K.M. Shanmugam v. SRVS (P) Ltd. and others, AIR 1963 SC 1626.
21
Surya Dev Rai v. Ram Chandra Rai, 2003(6) SCC 675.
22
T C Basappa v. T. Nagappa AIR 1954 SC 440; Hari Vishnu Kamath v. Ahmad Ishaque AIR 1955 SC 233, 243-44
Pren Singh v Custodian General, Evacuee Property, AIR 1957 SC 804.
20

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- Respondents-

19. In the present case, COMPAT has delved into an issue of abuse of dominant position, which
is within its exclusive jurisdiction.23 The COMPAT has a wide mandate under section 18 of
the Competition Act, 2002 which authorizes it to enquire into matters such as the instant
one. Competition bodies across the globe exercise jurisdiction in matters pertaining to
licencing agreements.24 It is now a settled that IP rights are not absolute and that their
exercise may amount to abuse of dominance. 25 Licensing matters in pharmaceutical sector
have caught Competition regulators attention globally given the repercussions it has on
public health.26 In India too, the Competition Commission has the authority to delve into and
pronounce judgments on antitrust liability arising out of license refusal. 27 Thus there is no
doubt that the COMPATs order is well within the jurisdiction.
20. This Court has held that once the High Court has decided that a tribunal had the jurisdiction
to decide an issue and the tribunal has decided the issue, rightly or wrongly, it will not
interfere. 28
21. It is also humbly submitted that the COMPATs order is clearly restricted to the
determination of abuse of dominant position and the effectuation of fundamental rights, if
any, is purely incidental and consequential to the decision setting liability under section 4 of
the Act of 2002.
22. Furthermore, the contention of the appellants that the order of the COMPAT violates its
fundamental rights is preposterous in light of the principle that a judicial or quasi-judicial
body, while acting in judicial capacity cannot violate fundamental rights. 29 A nine judge
23

Section
61,
Competition
Act,
No.
12
of
2003,
available
at:
http://cci.gov.in/images/media/Advocacy/CompetitionAct2012.pdf.
24
Id, Section 18.
25
Indian Performing Rights Society v. Eastern Indian Motion Pictures Association, (1977) 2 SCC 820.
26
Competition
and
Regulation
Issues
in
the
Pharmaceutical
Industry,
available
at:
http://www.oecd.org/competition/sectors/1920540.pdf.
27
Mcx Stock Exchange Ltd. & Ors v. National Stock Exchange Of India, Case No. 13 of 2009 (COMPAT,
5/12/2014.
28
A.V. Venkateswaran, Collector of Customs, Bombay v. Ramchand Sobhraj Wadhwani and Anr., AIR 1961 SC
1506.
29
Ujjam bai v. State of UP, AIR 1962 SC 1621.

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bench of this Court 30 unanimously came to the conclusion that an authority acting judicially
cannot violate fundamental rights.31
23. Without prejudice to the arguments advanced hitherto justifying COMPATs judgment, even
if it is assumed for the sake of argument, that the judgment delivered by it is wrong, it would
not warrant the issue of a writ of certiorari because the requirement for exercise of
jurisdiction under Article 226 is an error evident on the face of the record.
24. In the present matter, it cannot, by any stretch of imagination, be held that the error, if any, is
one that is overwhelmingly visible on the face of the records. An error cannot be said to be
one on the face of records if arguments or an examination is required to establish the same 32
and where two inferences are reasonably possible and the subordinate court has chosen to
take one view, the error cannot be called gross or patent.33 For the exercise of the jurisdiction
under Article 226, the error must be palpable.34
25. A constitutional bench of this court held that an error of law must be corrected via a writ
which should be an error on the face of records. 35 Further this Court observed, that the
impugned conclusion should be so plainly inconsistent with the relevant statutory provision
that no difficulty is experienced by the High Court in holding that the said error of law is
apparent on the face of the record. 36 If it requires an examination/argument to establish the
error, if it has to be established by a long drawn out process of reasoning/complicated
arguments, on points where there may considerably be two opinions, then such an error
would cease to be an error of law.37
30
31

Mirajkar v. State of Maharashtra, 1966 SCR (3) 744.

Namit Sharma v. Union of India, (2013) 1 SCC 745.

32

Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanaooa Tirumale, AIR 190 SC 137, See also Hari Vishnu
Kamath v. Ahmad Ishaque, AIR 1955 SC 233, Beant Singh v. UOI, AIR 1977 SC 388.
33
Surya Dev Rai v. Ram Channder Rai, (2003) 6 SCC 675.
34
Bijili Cotton Mills Pvt. Ltd. v. Industrial Tribunal, AIR 1972 SC 1903.
35
Syed Yakoob v. K. S. Radhakrishnan, AIR 1964 SC 477.
36
Id.
37
Satyanarayan Laxminarayan Hegde v. Millikarjun Bhavanappa Tirumale, AIR 190 SC 137.

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26. In arguendo, it is respectfully submitted that even if it is held that the decision of COMPAT
violates 19 (1) (g) and it is rendered in excess of jurisdiction, the decision is far from being
so fraught with manifest errors that no argument or examination thereof is required to come
to that conclusion.
27. Thus, in the absence of any patent error in the judgment of the COMPAT, the High Courts
refusal to intervene is correct and thus, the instant SLP may be rendered not maintainable.
II. THE DECISION OF HONBLE HIGH COURT SHOULD BE UPHELD.
A. COMPATS ORDER ONLY INCIDENTALLY ENFORCES FUNDAMENTAL RIGHTS.
28. It is most humbly submitted that COMPAT did not decide on issues pertaining to
fundamental rights but the consideration was only incidental to the primary issue, which
pertains to abuse of dominant position which squarely falls within its competence.
29. It is only natural that a body acting judicially cannot be expected to perform its functions
within the confines of a specific periphery.38 This court has held that incidental enforcement
of matters beyond a judicial/quasi-judicial bodys competence is not entirely forbidden. 39 It
has further been reiterated that a decision which only incidentally overshoots the jurisdiction
provided under the statute, shall be upheld to be a valid decision. 40
30. In the present matter as well, COMPAT was posed with the question pertaining to abuse of
dominant position by Zayers refusal to licence and its attempt to injunct Kiplas
manufacture and sale41 which falls in the exclusive domain of COMPAT. The decision is
bound to have incidental and consequential implication on the right to health of the public.
31. It is argued that COMPAT cannot be oblivious to the constitution and is in fact, bound to
keep the spirit of the constitution in mind while delivering judgments. It is settled that the

38

Namit, supra note 30 at

Kartar Singh v. State of Punjab, (1994) 3 SCC 569.
40
Southern Pharmaceuticals & Chemicals v. State of Kerala, (1981) 4 SCC 391. See also, State of Rajasthan v. G.
Chawla, AIR 1959 SC 544, Amar Singhji v. State of Rajasthan, AIR 1955 SC 504, Delhi Cloth and General Mills
Co. Ltd. v. Union of India, (1983) 4 SCC 166 and Vijay Kumar Sharma v. State of Karnataka, (1990) 2 SCC 562.
41
Moot Proposition 6.
39

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- Respondents-

beacon lights of DPSPs and Fundamental rights 42 must illuminate not just the lawmakers,
but the Courts too.43
32. Moreover, the preamble to Competition Act, 2002 envisions the promotion of competition in
the market and protection of the freedom to trade and matters incidental thereto. This Court
has held that the preamble is a vital source in interpreting the legislation. 44 The preamble
depicts the intent of the legislature to authorize COMPAT to delve into incidental matters to
effectively discharge the responsibilities entrusted to it.
33. Thus it becomes clear that the enforcement of Article 21 is only an inevitable effect of
COMPATs decision and not the reason for the judgment itself.
ARGUENDO: THAT THE COMPAT HAS THE JURISDICTION TO

ENFORCE FUNDAMENTAL

RIGHTS.
34. It is most humbly submitted that even if it is assumed that COMPAT is directly deciding

upon the matters pertaining to fundamental rights, it possesses the jurisdiction to do so in

light of the decisions of the Honble Supreme Court empowering tribunals to decide on
issues pertaining to fundamental rights.45
35. Considering the pendency in High Courts as "catastrophic, crisis ridden, almost
unmanageable", the Law Commission of India (LCI) recommended the divesting of the
jurisdiction enjoyed by the High Courts by setting up specialist courts and tribunals.
36. The degree to which these tribunals replaced the High Courts came up for consideration in
L. Chandra Kumar v. Union of India.46 The Court specifically rejected the argument that
tribunals should restrict themselves to handling matters void of constitutional determinations
and observed that a large majority of cases before tribunals involve interpretation of

42

Chandrachud CJ. In Olga Tellis v. Bombay Municipal Council, AIR (1985) 180 SCR Supl. 2, 51, at 73.
State of Kerala v N. M. Thomas, 1976 SCR (1) 906.
44
Kashi Prasad v. State, AIR 1950 All 732; See also I.C. GolakNath v. State of Punjab, AIR 1967 SC 1643.
45
L. Chandra Kumar v. Union of India, AIR 1997 SC 1125.
46
Id.
43

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fundamental rights and to hold that the tribunals have no power to handle matters involving
the same would render their formation infructuous.47
37. It was made clear that the tribunals being close to substitutes of High Courts can adjudicate
upon matters which involve constitutional determination or otherwise of such laws as
offending the fundamental rights48 in so far as the matter was heard by a bench consisting
of one judicial member.49 In Namit Sharma50 this Court held that specialized body of persons
were capable of dealing with complex constitutional questions if they possessed
knowledge and experience in law.
38. In the instant matter, the decision has been rendered by the COMPAT. It is pertinent to note
that the sole person appointed to the tribunal since September, 2014 is Honble Mr. Justice
Singhvi, retired Supreme Court judge51 who possess the requisite knowledge and expertise
to deal with the matter and decide upon issues of constitutional importance.
39. Also, the preamble to Competition Act, 2002 envisions to establish an authority to ensure
freedom of trade enshrined under Article 19(1) (g) and perform all functions incidental
thereto which may extend to effectuation of fundamental rights in the course of performing
the duties assigned to it.
40. Thus, in view of the above judgments, it may be concluded that the jurisdiction to decide
upon fundamental rights issue and constitutional provisions are well within the ambit of
COMPAT.
B. THAT THE APPELLANTS RIGHT UNDER ARTICLE 19 (1) (G) HAS NOT BEEN VIOLATED.
1 THAT A JUDICIAL DECISION CANNOT VIOLATE FUNDAMENTAL RIGHTS.
41. It is most humbly submitted before the Honble Supreme Court, that this court has
conclusively settled that a decision rendered in by a judicial or quasi-judicial capacity

47

Madras Bar Association v. Union of India & Anr., IN THE SUPREME COURT OF INDIA CIVIL
ORIGINAL/APPELLATE JURISDICTIONTRANSFERRED CASE (C) NO. 150 OF 2006.
48
Chandrakumar supra note 45 at
49
Id.
50
Namit, supra note 30 at
51
Hon'ble Mr. Justice G.S. Singhvi available at: http://compat.nic.in/Hon'ble%20Mr.%20Justice%20GS
%20Singhvi.pdf.

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cannot violate fundamental right and thus, the decision of COMPAT cannot violate Zayers
fundamental rights under 19(1) (g).
42. A 7 judge bench of this Court unanimously decided that judicial officers discretion is not
arbitrary and a provision of appeal before a superior court is always available. Ergo, there is
hardly any cause to apprehend violation of fundamental rights by a judicial order. 52
43. Moreover, Frankfurter, J. and Stone, C.J. in Snowden v. Hughes53, reiterated that if any
judicial order was attacked on the ground that it was inconsistent with Article 14, the proper
remedy to challenge such an order would be an appeal or revision as may be provided by
law. In Rupa Ashok Hurra54, this Court upheld the views stating, that final order of this
Court cannot be challenged as being violative of fundamental rights.55
44. An eleven judge bench in Mirajkars case 56 held that, an argument that a judgment violates
ones fundamental rights of an individual is based on a complete misconception about the
true nature and character of judicial process and of judicial decisions.
45. Moreover, it categorically said, it would be singularly inappropriate to assume that a judicial
decision pronounced by a Judge in relation to a matter brought before him for adjudication
can affect the fundamental rights of the citizens under Article 19(1). What a judicial decision
purports to do is to decide the controversy between the parties brought before the court and
nothing more.

52

Parbhani Transport Coop. Society Ltd. v. Regional Transport Authority, AIR (1960) SC 801; See also Budhan
Chaudhary v. State of Bihar, AIR 1955 SC 191; Prem Chand Garg v. Excise Commissioner, AIR 1963 SC 996.
53
321 U.S. 1 (1944).
54

Rupa Ashok Hurra vs Ashok Hurra & Anr , Writ Petition (civil) 509 of 1997
See also, Triveniben v. State of Gujarat 1989 1 SCC 678; A.R. Antulay v. R.S. Nayak, Krishna Swami v. Union of
India, 1992 (4) SCC 605; Mohd. Aslam v. Union of India, 1996 (2) SCC 749; Khoday Distilleries Ltd. v. Registrar
General, Supreme Court of India, 1996 (3) SCC 114; Gurbachan Singh v. Union of India, 1996 (3) SCC 117; Babu
Singh Bains v. Union of India, 1996 (6) SCC 565, P. Ashokan v. Union of India, 1998 (3) SCC 56.
55
Radhe Shyam v. Chhabi Nath & Jagdish Prasad v. Iqbal Kaur & Ors. (Clubbed Petitions) CIVIL APPEAL
NO.2548 OF 2009, SLP (C) NO.25828 OF 2013 respectively.
56
Mirajkar supra note 29 at See also, A.R. Antulay v. R.S. Nayak, 1988 (2) SCC 602.

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46. Placing reliance on the above views, it is unambiguous that COMPAT, discharging a judicial
decision cannot violate fundamental rights and thus the contention of Zayer Ind. that
COMPATs decision is violating its 19(1) (g) deserves to be rejected.
2 THAT ZAYERS REFUSAL TO LICENSE IS NOT JUSTIFIABLE UNDER ARTICLE 19 (1) (G).
47. It is most humbly submitted before the Honble Supreme Court that Zayers refusal to
license cannot be justified in the garb of exercise of 19(1) (g) as is clearly discernable from a
series of judgments.
48. The fundamental right of a citizen to carry on any occupation, trade or business under Art.
19(1) (g) of the constitution is not absolute, it is subject to reasonable restriction which may
be imposed by the state in the interests of the general public.57
49. In the case of , the court held that, the right to form an association implies a right not to
form an association, however, it does not follow that the negative right must also be
regarded as a fundamental right.58
50. Further, in Excel wears case59, the court held that while the right not to start a business is an
absolute one, however to close a business is not at par with the same and cannot be termed
as fundamental right, and reasonable restrictions may be imposed to deter reckless, unfair,
unjust or mala fide closures, in order to protect public interest, such as the prevention of
unemployment.
51. Moreover, restrictions imposed shall take into account the nature of the right alleged to have
been infringed, the extent and urgency of the evil sought to be remedied thereby and the
prevailing conditions at the time.60
52. The same principle was applied in the Bar Girls Case, in which one of the contentions was
that whether a ban on dancing in bars would tantamount to violation of Article 19(1)(g). It
was later held that the restrictions in the general public interest would include that of general
57

Ramchand v. Union of India, AIR 1963 SC 563 (566); See also JK Industries Ltd. v. Chief Inspector of Factories,
(1996) 6 SCC 665.
58
AIR 1956 SC 676.
59
Excel wear v. Union of India, (1978) 4 SCC 224.
60

Harakchand Ratanchand Banthia v. Union Of India And Ors, AIR 1970 SC 1453.

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public morality and public health61. The court also stated that, when a land is acquired for
public purpose, even if the right to shelter of an individual is violated, public interest would
prevail.62
53. Similarly, in the present situation right to license is a fundamental right, however right to
refuse to license is not absolute right and has to be restricted by legal provisions under
clause (2) to (6) of this article.63
54. Further, the essential facilities have been recognized in India as well as globally as an
exception to the right to refusal wherein such an act can constitute abuse.
55. Section 4(2)(c) of the Competition Act is worded in expansive terms which suggest that any
entry barriers (strategic or structural) created by a dominant enterprise, via its conduct which
results in denial of market access, in any manner, will be an abuse. It is pertinent to note that
in any manner was added via an amendment in 2007 enhancing the scope unambiguously.
The CCI has discussed the scope of this section in the BCCI case.64
56. The case further enumerates that, the said clause will cover all acts done by dominant
undertaking which will result in market foreclosure for the competitors in the same market.
It also pointed that these abuse mentioned below are merely enumerative and there may be
other kind of actions which may be done by the dominant undertaking which may result in
denial of market access if it can be shown these actions have foreclosure effects.
57. The intent of the said clause was to include a doctrine of essential facility which has been
propounded succinctly by the European Commission in the Macgills case and Oscar
Bronner case to penalize dominant entities which refuse to provide raw material which is
indispensable.
58. The same is evident to have been incorporated via various judgments in India, as the court in
MCX v. NSE65, first time discussed essential facilities in depth and held that, if the IPR
61

State of Maharashtra v. Himmatbhai AIR 1970 SC 1157.

Parmeshwar Deen Patel vs Snehlata And Anr., 2003 (2) Mad LJ 701.
63
Babulal Parate vs State Of Maharashtra And Others, AIR 1961 SC 884.
64
Surinder Barmi v. Board of Control of Cricket in India, Case No. 61/2010 dated 8.2.2013.
65
2011CompLR0129 (CCI).
62

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owner is a monopolist or dominant player holding infrastructure facility in market, he has

the duty to license the intellectual property to competitors. In that case refusal to license will
amount to an anti-competitive practice.
59. It was followed in HT Media Limited v. Super Cassettes Industries Limited66, in which the
court held that to eliminate practices having adverse effect on competition, promote and
sustain competition, protect the interests of consumers and ensure freedom of trade carried
on by other participants, in markets in India, dominant players refusal to license on
essential facilities would amount to abuse.
60. Further, the CCI in analysis of the Coal India case 67, mentioned that coal is an essential
facility and indispensable for generation of electricity and that the obligations and
responsibilities of the power generating companies extend beyond the power sector in as
much as any inefficiency and anti-competitive conduct in one segment of the value chain
would have the effect of creating and causing a systematic risk in the entire economy.
61. Also, essential facilities doctrine have been recognized to be based on sound legal principles
and recognized across the globe to be an exception to refusal to license.
62. As in Margill68 the ECJ was also of the view that refusal to license is anti-competitive and
establishes the doctrine of exceptional circumstances and essential facilities for
justifying refusal to grant license.
63. In Sea Containers and Stena Sealink69, the European Commission officially defined the
notion of EFD as a facility or infrastructure, which is essential for reaching customers
and/or enabling competitors to carry on their business, and which cannot be replicated by
any reasonable means
64. Further, ECJ in Michelin v Commission 70 held that a dominant undertaking has a special
responsibility not to allow its conduct to impair or distort competition
66

2014CompLR129 (CCI).
In Re: M/s GHCL Limited and M/s Coal India Limited, Case No. 08 of 2014.
68
Magill ITP, BBC and RTE v. Commission, Cases C241/91 and C242/91 (1995), ECR I-743.
69
OJ [1994] L 15/8.
70
[1983] ECR 3461.
67

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- Respondents-

65. Furthermore, in the case of Terminal Railroad 71, Aspen Ski72, or Commercial Solvents73, the
court held that, the new product requirement is unnecessary, all that is required is a
consumer surplus which can be either through the demand for a new product in an
innovative market and the demand for the same product at a lower price in a non-innovative
market. In the latter case, the entrants need not prove that they have created a new product if
they can provide a surplus to the consumers.
66. Also in the case of MCI v AT&T 74, the court held that, a monopolist control of an essential
facility can extend to others stating it to be abuse and the antitrust laws may impose on the
firm, in a situation when: (1) the essential facility is controlled by a monopolist; (2) the
owner of the facility has unreasonably denied access of the facility to the competitor; (3) a
competitor cannot practically or reasonably duplicate the facility; and (4) the grant of access
to the facility would be feasible.
67. Similarly, in the present case, Zayer Ind. has the patent over LebinX the only known cure
for this virus, putting him into a dominant position & making the drug to be an essential
facility, the refusal to license of which, taking into consideration the epidemic spread and
the growing public need would amount to abuse.
68. Further, the court in the case of Mid-South Grizzlies held that, the doctrine of essential
facility is applicable only where a party is being denied access to something necessary for
that party to engage in business which is controlled by his competitors. 75 It has also been
held that a party in possession of an essential facility cannot deny its access to competitors
in an absence of a legitimate reason.76

71

224 U.S. 383 (1912).

472 U.S. 585 (1985).
73
[1974] ECR 223.
74
708 F.2d 1081.
75
Mid-South Grizzlies v. Nat'l Football League, 550 F. Supp. 558, 570; See also, United States v. Terminal Railroad
Ass'n, 224 U.S. 383 (1912), Intel Cmp., FTC Dkt. No. 9288 (June 8, 1998) (Complaint).
76
City of Anaheim, 955 F.2d at 1379.
72

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69. Also, In-re Taraorimandi77, it was held that prohibiting rivals from entering into a territory
completely, eliminates any competition in that area and is therefore highly prejudicial to
public interest. Also, in the Microsoft decision, the commission stated that consumers were
harmed because the elimination of competition in the market of operating system would
restrict their choices. As a consequence of Microsofts behavior various product
characteristics that were important to consumers were currently artificially relegated to
second position.78 It was further held that Microsofts refusal to supply stifled innovation in
the impacted market and of diminished consumers choice. Thus, there was a case of indirect
prejudice to the consumers which further substantiates the conduct of leveraging.
70. It is therefore clear that without the license or requisite IPR to produce the drug for Lebola,
it could have been reasonably replicated by Kipla, in the given circumstance rendering it to
be an essential facility, the refusal to which would not just obliterate all competition in the
3

market and monopolize it but also put the rights to health of public in peril.
THAT THE RIGHT TO HEALTH UNDER ARTICLE 21 OVERRIDES THE RIGHT TO TRADE AND

PROFESSION UNDER ARTICLE 19 (1) (G).

71. It is the humble submission of the respondents that the cardinal rule of harmonious

construction is that one article of the constitution cannot be used to defeat the object of the
other.79
72. The appellant contends that its Art. 19(1) (g) has been violated due to the decision of
COMPAT, which gave the judgment taking into consideration Art. 21. Article 19(1)
guarantees certain Fundamental Rights, subject to reasonable restrictions on the exercise of
those rights.

77

(1994)2 CTJ 129 (MRTPC).

EC Commission v. Microsoft, COMP/C-3/37.792.
79
M.M. Yaragatti vs Vasant and Ors., ILR (1987) Kant 3069.
78

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73. Restrictions is a wide expression80 and would comprise within itself the interests of public
health and morals81, which may include a section of the public 82, economic stability of the
nation83 and equitable distribution of essential commodities at fair prices.84
74. In determining the reasonableness of the restriction, the court has to take into consideration
the nature of the public interest involved, the underlying purpose of the restriction imposed,
the extent of urgency of the evil sought to be remedied thereby, the prevailing conditions at
that time85 and the danger or injury which may be inherent in an unbridled exercise of the
right. A restriction which is commensurate with the need for protection of the public cannot
be said to be excessive or unreasonable,86 even though it goes up to the extent of
extinguishment of the individuals title to a property,87 or causes hardship in individual
cases,88 or to traders.89
75. Right to medical care and health, a healthy body is the very foundation of all human
activities90, which was further emphasized upon in, State of Punjab & Ors. v. Ram Lubhaya
Bagga & Ors.91, wherein the court held, it is an obligation upon the state to tone up the
health services since the same was held to be an indispensable part of Article 21.
76. In Gujarat Ambuja Cements v. Chhavi Raj Singh92, the fundamental rights were enforced
against a private party who was ordered to pay compensation who suffered due to the
80

All Delhi Rickshaw Union v. Municipal Corpn., AIR 1987 SC 648.

State of Maharashtra v. Himmatbhai AIR 1970 SC 1157.
82
Prithwish Roy v. Adrish Majumdar, AIR 1952 Cal 273; AIR 1956 Trav-Co 19 (22) (FB).
83
Glass Chatons v. UOI Air 1961 SC 1514.
84
Narendra v. UOI (1960) 2 SCR 375; UOI v. Bhanmal, (1960) 2 SCR 627.
85
State of Madras v. Roq, (1952) SCR 597; Harakchand v. UOI, AIR 1970 SC 1453; State of Maharashtra v.
Himmatbhai, AIR 1970 SC 1157, Saghir Ahmed v. State of UP, AIR 1954 SC 728; Cooverjee v. Excise
Commissioner (1954) SCR 873.
86
State of Maharashtra v. Rao, AIR 1971 SC 1157.
87
Express Newspapers v. UOI AIR 1958 SC 578.
88
Sivaranjan v. UOI, AIR 1959 SC 556.
89
State of Karnataka v. Hansa Corp., AIR 1981 SC 463.
90
Lambodar Panigrahi vs Civil Judge, 1996 II OLR 319.
91
(1998) 4 SCC 117; See also N.D. Jayal & Anr. v. UOI & Ors. (2004) 9 SCC 362; Consumer Education and
Research Centre v. Union of India and Life Insurance Corporation v. Consumer Education and Research Centre,
1995 SCC (3) 42.
92
(2007) 15 SCC 632.
81

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pollution caused by the loading and unloading of coal causing health complications. The
judgment held that the Right to proper health and health care was an integral part of Art. 21.
77. In the case of Rural Litigation and Entitlement Kendra v. State 93, the court held that right
under art. 19(1) would stand restricted if they are against the right to decent environment
and right to live peacefully etc. enshrined under art. 21.
78. In the case of
the court held that, the state may consider the relation of fundamental
rights, and accommodate their co-existence and, in the interests of the community, limit one
right so that others may be enjoyed 94 and something that is opposed to the public cannot be
claimed as a right by a citizen under Article 19.95
79. Following the same, in the case of Indian Handicrafts Emporium and Ors. v. Union of India
and Ors96 the court held that,.The court held that business or trade practices which are
offensive to flora and fauna or human beings cannot be permitted to be carried on in the
name of fundamental right.
80. Analogously, isolation of AIDS patients received the approval of the court even though such
isolation is an invasion upon the liberty of a person since in case of a conflict between the
right of an individual and public interest, the former must yield to the latter.97
81. Similarly, in Vishal Yadav vs State Of U.P., the court held that, no citizen can claim under
Article 19(1) and concomitantly violate the provisions of an act.98
82. Application of the above judgments to the present situation would entail that in an epidemic
like situation, Zayers act of restricting Kipla, a willing licensee to enter into the market
cannot be shielded in the garb of exercise of the right under Art. 19 (1) (g) since the
COMPATs decision holding this to be an abuse of dominant position, takes into account the

93

AIR 1988 SC 2187.

Krishnamurthy v. Venkatesivaran, AIR 1952 Mad 95; AIR 1951 Bom 459; AIR1951 Pepsu 59.
95
Radha Krishna Reddy v. Satvik Drugs, 1992 (1) Mad LJ 582.
94

96

CASE NO.:Appeal (civil) 7533 of 1997.

Smt. Lucy R. D'Souza And Etc. Etc. vs State Of Goa And Others, AIR 1990 Bom 355; (1990) 1 Goa LT 36A.
98
1196 (1) Chand LR (Civ and Cri) 565 (568) (DB) (J&K).
97

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social cost and right to health of people which is bound to prevail over the rights of Zayer
India Ltd.
C. THAT ZAYERS ATTEMPT TO INJUNCT KIPLA IS AN ABUSE OF ITS DOMINANT POSITION.
83. It is humbly submitted before the Honble Court that Zayer India Ltd.s attempt to injunct
Kipla by instituting an original suit before the Honble Delhi High Court is an abuse of its
dominant position under Section 4 (2) (b) of the Competition Act, 2002.
84. It is most humbly argued before this court that an act that might prima facie seem legitimate,
might, when looked at in toto with all peripherals enmeshed, lead to an entirely different
picture altogether. As is the case in the instant matter where Zayer Indias exercise of legal
remedy might prima facie seem to be a legitimate exercise of ones rights, when looked at in
toto present a discernable picture altogether. The European Unions Court of Justice (ECJ)
in the case of AstraZeneca v. Commission

99

held that a prima facie legitimate conduct,

when looked at in entirety with all the surrounding circumstances being considered might
present a different picture.
85. In AstraZeneca the appellants delayed the entry of generic variants of the medicine Losec
that they produced, by employing means which were prima facie perfectly, but at the root of
which lay hoards of mala fide interests. The ECJ sitting in judgment levied heavy penalties
on AstraZeneca and termed this act as anti-competitive. In addition to which, the ECJ laid
immense emphasis upon firms in dominant positions in the market exercising their powers
with utmost care and responsibility with little or no room for brazen conduct on their part.
86. In the instant matter Zayer first refused license to Kipla and then subsequently exercised its
right (to a legal remedy) in order to get Kipla injuncted. It is quite evidently a carefully
orchestrated and choreographed market maneuver to deny market access to Kipla in a bid to
ensure that the dominant position of Zayer India in the market is intact. This falls within the
rubric of an abuse of dominant position per Section 4 (2) (b) of the Competition Act, 2000.
99

Case C-457/10 P.

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87. It is also humbly submitted before this Honble court that in the matter of Les Laboratoires
Servier and Servier Laboratoires Limited v. Apotex Inc. and Ors.100 the England and Wales
Court of Appeal passed an order to penalize Servier for their act of delaying the entry of
generic drug manufacturers in the market via entering into out of court settlements by
offering the generic drug manufacturers money to stay away from Serviers market. The
Court also went on to state that it was indeed a flagrant misuse of the judicial concept of
out-of-court settlements. The European Competition Commission too fined 101 Servier 427.7
Million Euros under Article 102102 of the TFEU (Treaty on the functioning of European
Union) citing that it was on five occasions that Servier was found to be privy to a pay for
delay103 contracts in a bid to keep aloof generic manufacturers and certainty that generic
producers would stay out of the national markets104and that the same amounted to an abuse
of dominant position under Article 102 of the TFEU.
88. It is a humble submission before this Honble court that Zayer Indias conduct of denying
licence to Kipla Pvt. Ltd. and then subsequently moving the Delhi High Court in an original
suit for injuncting Kipla Pvt. Ltd. was in all senses of the word a vexatious exercise of the
legal remedy available to Zayer India, and was done with a mala fide intention at its
epicentre, that of delaying the market entry of Kiplas generic drug LebinX which
potentially threatened Zayer Indias niche market.

100

[2012] EWCA Civ. 593.

Antitrust: Commission fines Servier and five generic companies for curbing entry of cheaper versions of
cardiovascular medicine, available at: http://europa.eu/rapid/press-release_IP-14-799_en.htm (last seen on
September 18th, 2015).
102
Competition:
Antitrust
procedures
in
abuse
of
dominance,
available
at:
http://ec.europa.eu/competition/publications/factsheets/antitrust_procedures_102_en.pdf (last seen on September
21st, 2015).
103
Id.
104
Antitrust supra note 91 at ( 2).
101

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89. It is also submitted before the Honble apex court that patent legislations across the globe,
including Indias Patent Act, 1970, are making more room for process patents 105, in which
involves patent protection for the innovative steps/processes that an enterprise/individual
undertakes to further the development of a known product. These steps in toto, if are distinct
in nature from the steps followed to prepare the same product by another firm/individual,
and fulfil the other criterion of patentability, can be protected by a patent. 106 Patent holders
of such patent are allowed protection over an innovative alternative to arrive upon a product
existent in the market.107
90. On the same lines, it is humbly argued before this Honble Court, that Kipla \ sought to
patent a novel and distinct process of making a drug. The patent was never sought on the
active compound of the existent drug Lebocin worked by Zayer India. Ergo, Kiplas attempt
to manufacture and sell LebinX couldnt have amounted to a patent infringement in the first
place.
91. It is thus, humbly submitted before the Honble Court that the fact that LebinX was in fact
manufactured via an employment of a completely novel process, an infringement suit in a
bid to injunct Kipla was indeed a vexatious exercise of the legal right that Zayer had.

105

Section 2(1)(j)(ja) Indian Patent Act, No. 39 of 1970, available at: http://ipindia.nic.in/ipr/patent/patact1970-399.html.
106
RAMA SARMA, COMMENTARY ON INTELLECTUAL PROPERTY LAWS 28 (1st Edn.).
107
P. NARAYANAN, PATENT LAW 264(4th Edn.).

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- Respondents-

PRAYER
Wherefore, in the light of facts presented, issues raised, arguments advanced and authorities
cited, counsels on behalf of the Respondents humbly submit that the Honble Court to kindly
declare and adjudge that:
1.
2.

The present SLP is not maintainable in law.

The decision of Honble High Court is correct and should be upheld.

And pass any other order which this Honble Court may deem it fit in the light of justice, equity
and good conscience.
And for this act of kindness of your lordship the respondents shall as duty bound ever pray.

On behalf of Kipla and Anr.

TC 29
Counsels for the Respondents

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