Max Hospitals failed to get any immediate reprieve from Delhi High Court as the latter posted the plea of this Hospitals Group challenging the CCI probe for further hearing on November 16. 

The matter is scheduled for a final hearing before CCI on November 17.  In a brief hearing held by a single Bench of Justice Yashwant Varma on Thursday, Delhi High Court did not pass any order on the plea of Max Hospitals seeking an extension of time (which is expiring on October 30) to file replies to the investigation report forwarded by fair trade regulator in the ongoing inquiry against Max Hospitals for abusing their market power.

The Delhi High Court had in late September 2022 deferred the plea filed by the six Delhi-based Max group hospitals challenging the CCI proceedings against them for allegedly charging excessive/unfair prices by abusing their dominant position. Further hearing on the matter was fixed for October 14, but the court did not assemble on that date.

The Delhi HC has also then permitted the six hospitals to amend their petition to cover CCI’s January 2022 order within the scope of their challenge.

It maybe recalled that CCI, in the last two orders (flowing from the January 2022 order), declined the request of Max hospitals to access confidential documents of other hospitals. The previous two orders were the basis of the challenge by the hospital chain.

Two grounds for challenge

Max hospitals had two grounds for challenging CCI proceedings — they were not given sufficient time to reply to the investigation report, and secondly, they wanted access to confidential documents of other hospitals.

A single Bench of Justice Yashwant Varma allowed Max group to amend its petition so that the challenge could cover the CCI’s January 2022 order. This order had specified that each of the 12 hospitals concerned should be treated as a separate case, and therefore the pricing information of each hospital cannot be shared with the others. 

The Director-General (investigations) had, in December 2021, submitted investigative reports on each of the  12 super-speciality hospitals of the chains that operated in NCR, and concluded that they had abused their dominant positions by charging “unfair and excessive prices” for rooms, medical tests, medical devices, medicines and consumables.

After the DG reports against 12 hospitals were submitted, notices were issued to them by CCI, calling for their response to the investigation reports. However, before CCI could take up the matter for a final hearing, Max hospitals approached Delhi High Court challenging the CCI probe, alleging they had not been provided with the confidential documents and not given sufficient time to respond to the investigation report.

Could impose heavy penalty

In this case, the CCI can potentially impose a penalty of up to 10 per cent of the average turnover for the past three financial years of an enterprise that has violated competition laws.

The six hospitals that had approached the Delhi High Court are Max Super Speciality Hospital (in Patparganj, Saket, and Shalimar Bagh); Dr BL Kapur–Max Super Speciality Hospital, Pusa Road; Max Multispeciality Centre in Panchsheel Park and Max Multi Speciality Centre in Pitampura.  

Of the 12 hospitals that faced CCI scrutiny, six belonged to Max and two to Fortis. The other hospitals included Apollo Hospitals, Sir Ganga Ram Hospital and Batra Hospital.

In 2015, information was filed against Max Hospital (Patparganj), alleging charging excessive/unfair prices by abusing its dominant position. Thereupon, CCI ordered a probe and the investigation arm of CCI (Office of the Director General) submitted a report in 2017 finding Max Hospital abusing its dominant position by charging excessive prices for syringes. 

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