Dr. Reddy's Laboratories' writ petition against Competition Commission's interim procedural orders dismissed; High Court emphasizes judicial restraint.
In a significant ruling dated June 10, 2026, the Telangana High Court, presided by Justice Nagesh Bheemapaka, dismissed the writ petition filed by Dr. Reddy's Laboratories Limited challenging the procedural orders issued by the Competition Commission of India (CCI). The case revolved around allegations of anti-competitive practices concerning the pharmaceutical industry, implicating Dr. Reddy's Laboratories among other entities.
The petitioner's writ sought to challenge the CCI's directive requiring submission of objections to an investigation report and audited financial statements for specified fiscal years. Dr. Reddy's Laboratories contended that such procedural orders were illegal and prejudicial, especially considering the prolonged delay in the investigation process.
Justice Bheemapaka emphasized the necessity for judicial restraint in ongoing statutory proceedings under the Competition Act, 2002. He clarified that orders directing procedural compliance do not determine rights or impose penalties; hence, they are not subject to interference under Article 226 of the Constitution. The court noted that the investigation report submitted by the Director General was part of an ongoing inquiry under Section 26 of the Act, which is procedural and not adjudicatory in nature.
The court further highlighted that the delay in the investigation was largely due to judicial stays and did not invalidate the proceedings in the absence of demonstrated prejudice affecting the merits of the case. Additionally, the court pointed out that alternative remedies were available, notably an appeal before the National Company Law Appellate Tribunal (NCLAT), which precludes writ interference at intermediate stages.
Justice Bheemapaka dismissed the contention regarding the absence of a judicial member in the CCI composition, stating that such procedural defects do not affect the validity of the proceedings under Section 15 of the Act. The court also allowed Dr. Reddy's Laboratories to raise contentions regarding coercion by trade associations and other merits before the CCI during the inquiry process.
The judgment underscores the High Court's stance on maintaining procedural integrity and respecting the statutory framework of competition law. It reinforces the principle that judicial intervention in ongoing statutory processes is unwarranted unless there is a manifest violation of jurisdiction, illegality, or procedural fairness.
Bottom line:-
Judicial restraint is necessary in ongoing statutory proceedings under the Competition Act, 2002, especially at intermediary stages, as interference would disrupt the statutory process and legislative intent.
Statutory provision(s): Competition Act, 2002 Sections 26, 27, 53A, 3, 4, Article 226 of the Constitution of India
