Competition Appellate Tribunal

LSI City/Bench

LSI-1640-COMPAT-2017(NDEL)-Saurabh Tripathy vs. CCI.pdf

LSI: Applicant/Petitioner/Appellant Name

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LSI Identifier

4925/

COMPAT: Upholds CCI’s order, no contravention of provisions of Sec. 4 of Competition Act

Anonymous — Thu, 08 Jun 2017 13:45:34 +0000

COMPAT: Upholds CCI’s order, no contravention of provisions of Sec. 4 of Competition Act Anonymous (not verified) Thu, 08/06/2017 - 19:15

Conclusion

COMPAT dismisses appeal filed by Saurabh Tripathy (‘Appellant’), upholds CCI’s order that no case of contravention of the provisions of Sec. 4 the Competition Act 2002(‘the Act’) was made out; Notes that the CCI had looked at the Gas Sale and Purchase Agreement (GSPA) at length and “while it may not have commented upon some specific stipulations thereof, it cannot be said that it did not apply itself to those stipulations”; Further notes that the CCI did not agree with certain DG’s findings, observes that as per Sec. 27 once the CCI finds contravention of Sec. 3/4, it shall proceed to decide the consequences of its finding on the parties who have violated the relevant provisions of the Act; Refers to decisions in the case of Jindal Steel & Power Ltd., Arshiya Rail Infrastructure Ltd. wherein the exhaustive nature of the provisions of Sec. 53A(1)(a) (which delineates the appellate jurisdiction of the Tribunal) is specifically mentioned; Holds that “the jurisdiction of this Tribunal is quite clearly drawn in Section 53A(1)(a) and while we may find the scheme of Section 26 somewhat incomplete and unclear in some parts, the crux of the matter is that we are not in a position to intervene”

2017-05-15

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The order was passed by Shri. Rajeev Kher and Smt. Anita Kapur, Members

Advocates Shri. Sharad Gupta and Shri. Vinayak Gupta represented the Appellant, whereas Advocates Shri Saran Suri and Shri Suman N. Rawat, alongwith Shri Kamal Sultanpuri, DeputyDirector (Law) represented the Respondent

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Saurabh Tripathi

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LSI Nature of issues

Anti-competitive Agreements

Types of Agreements

Gas Sale and Purchase Agreement

Powers of Director General

Gas Sale and Purchase Agreement

Types of Agreements

Powers of Director General

LSI Judge Name

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Saurabh Tripathy

CCI

Great Eastern Energy

Shri. Sharad Gupta and Shri. Vinayak Gupta

3 - Anti-competitive agreements

4 - Abuse of dominant position

Shri Saran Suri and Shri Suman N. Rawat

LSI Citation

LSI-1640-COMPAT-2017(NDEL)

LSI Judiciary Level

LSI City/Bench

LSI-1634-COMPAT-2017(NDEL)-DLF Home.pdf

LSI Identifier

1639/1546

COMPAT: Dismisses DLF’s appeal as similar matters pending adjudication before SC

Anonymous — Mon, 05 Jun 2017 11:31:34 +0000

COMPAT: Dismisses DLF’s appeal as similar matters pending adjudication before SC Anonymous (not verified) Mon, 05/06/2017 - 17:01

Conclusion

COMPAT dismisses appeal filed by DLF Home Developers Ltd. (‘Appellant’) considering the fact that similar cases are pending final adjudication before SC; Appeal was filed against CCI’s order, wherein CCI found Appellants abusing their dominant position in relevant market by incorporating anti-competitive conditions in the Apartment Buyers’ Agreement (‘ABA’) executed between the parties; Remarks that “no purpose will be served by this Tribunal going into these appeals yet again, as the matters under dispute are receiving the attention of the Supreme Court”; Accordingly dismisses the appeal, allows parties to challenge the impugned order before SC

2017-04-10

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The order was passed by Rajeev Kher, Member and Anita Kapur, Member.

Sr. Advocate Ramji Srinivasan, along with Kanika Chaudhary Nayar, Nidhi Singh, Madhulika Bose and Tushar Bhardwaj represented the appellants.

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DLF Home Developers Ltd. vs. CCI

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DLF Home Developers Ltd.

DLF Ltd.

CCI

Ashutosh Bhardwaj

Lalit Babu

Sr. Advocate Ramji Srinivasan, along with Kanika Chaudhary Nayar, Nidhi Singh, Madhulika Bose & Tushar Bhardwaj

Real Estate

4 - Abuse of dominant position

LSI Citation

LSI-1634-COMPAT-2017(NDEL)

LSI Judiciary Level

LSI City/Bench

LSI-1630-COMPAT-2017(NDEL)-Anand Prakash.pdf

LSI Identifier

1632/1540

COMPAT: CCI’s power to hear parties discretionary; Rejects violation of natural justice principle plea

Anonymous — Mon, 05 Jun 2017 08:30:03 +0000

COMPAT: CCI’s power to hear parties discretionary; Rejects violation of natural justice principle plea Anonymous (not verified) Mon, 05/06/2017 - 14:00

Conclusion

COMPAT holds no violation of principle of natural justice for not providing Anand Parkash Agarwal (‘Appellant’/’Informant’) right of hearing absent specific provision under the Competition Act, 2002 (‘the Act’) or Regulations thereunder, CCI’s power to hear parties discretionary; CCI while agreeing with the Appellant about dominance of Dakshin Haryana Bijli Vitran Nigam (‘DHBVN’/ ‘Respondent No. 1’), sole distributor of electricity in Haryana dismissed the complaint filed as no prima facie case of abuse of dominant position was made against DHBVN for charging differential fuel and power purchase cost surcharge adjustment to domestic and non-domestic consumers; Opines that in case of conflict between the Electricity Act, 2003 (‘the Electricity Act’) and the Act, the former would prevail, further observes that Sec. 173 and 174 of the Electricity Act which provide for its overriding effect (except certain specified Acts), nowhere stipulates provision of the Act would prevail over the Electricity Act; Relies on SC rulings in Kanwar Singh Saini and PTC India Ltd. to opine that in case the Appellant wished to challenge Electricity Regulations, then as the Regulations are made under the authority of delegated legislation, same can be tested only in judicial review proceedings before the courts; Accordingly dismisses the appeal holding that there is an implied immunity from Competition law in matters of electricity tariff approved by Appropriate Commission in terms of the Electricity Act

Decision Summary

Anand Parkash Agarwal (‘Appellant’/’Informant’) filed information in terms of Section 19(1)(a) of the Competition Act, 2002 ('the Act'/ 'the Competition Act') with the CCI claiming that Dakshin Haryana Bijli Vitran Nigam (‘DHBVN’/ ‘Respondent No. 1’), which was the sole supplier of electricity in the area of residence of the Informant, was charging Fuel and Power Purchase Cost Surcharge Adjustment (‘FSA’), by imposing an unfair and discriminatory price upon consumers and cross subsidizing the FSA cost and thus abused its dominant position.

CCI, while agreeing with the Appellant about dominance of DHBVN in the relevant market, did not agree that differential pricing constituted abuse of dominance in terms of Section 4 of the Act. CCI was of the view that, classification of consumers and corresponding FSA charged followed a rationale whereby domestic consumers was charged less than the non-domestic consumers and different FSA was levied for different categories of consumers depending upon the socio-economic conditions of the respective class of consumers. CCI held that, the classification appeared to have economic justification based on market segmentation and did not amount to discriminatory conduct. Accordingly, CCI dismissed the Appellant’s case, finding no prima facie case of abuse of dominance against the Respondent 1.

Appellant appealed against the order of the CCI before Competition Appellate Tribunal (‘COMPAT’), wherein, COMPAT framed the following issues:

1. Whether the impugned order suffers from the fatal flaw of contravention of principles of natural justice as the CCI did not give an opportunity of hearing to the Appellant while passing the impugned order, which was prejudicial to the appellant, under Section 26(2) of the Act

COMPAT noted the contention of the Appellant that the Commission should have heard him following the principles of natural justice i.e. audi alteram partem particularly since the Commission found itself constrained on account of lack of information to establish decline in the price of fuel and cost of power generation.

COMPAT observed that the General Regulations under the Act which are in the nature of subordinate legislation and did not make it obligatory upon the CCI to hear the informant and then form an opinion as to the existence of a prima facie case. Moreover, neither S. 4 nor S. 19 of the Act provided for any requirement of inviting the informant to assist the CCI before forming an opinion in terms of Section 26(2) of the Act.

COMPAT accordingly held that the right of hearing was not specifically provided in the Act or the General Regulations and the discretion to invite the Informant was exclusively of the Commission, and further no inquiry was made by the Commission while forming a prima facie opinion. Thus, if the Regulations vest the discretion with the Commission to invite or not to invite the informant, then the statutory discretion could not be questioned on the basis of the principles of natural justice because the Regulations have a force of law being in the nature of delegated legislation and could only be challenged in judicial review. COMPAT hence, concluded that there was no requirement to hear the appellant, while passing the impugned order.

2. Whether the Commission had the jurisdiction in the matter of alleged abuse of dominance arising from computation and levy of FSA which, as admitted by the Appellant in information filed with the Commission, was approved by the HERC i.e. the State Electricity Regulatory Commission

COMPAT relied SC order in Kanwar Singh Saini vs. High Court of Delhi – (2012) 4 SCC 307, wherein SC held, “when a statute gives a right and provides a forum for adjudication of rights, remedy has to be sought under the provisions of that Act.” COMPAT accordingly, held that the disputes which arose in regard to interpretation of a regulation made under Section 181 of the Electricity Act, 2003 (‘the Electricity Act’) could be taken in appeal to the Appellate Tribunal under Section 111 of the Electricity Act. If the Appellant was still aggrieved by the Regulations itself, then as held by the SC in the case of PTC India Ltd. vs. Central Electricity Regulatory Commission - 2010 (4) SCC 603, the validity of the Regulations made under the authority of delegated legislation, could be tested only in judicial review proceedings before the courts.

COMPAT relied on S. 173 and 174 of the Electricity Act which provide for the provisions of the Electricity Act to have an overriding effect except, that such provisions or any rule or regulation made thereunder shall not have any effect insofar as these are inconsistent with the provisions of the Consumer Protection Act, 1986 or Atomic Energy Act, 1962 or the Railways Act, 1989. The legislature did not put the Competition Act amongst the Acts whose provisions were to prevail over the provisions of the Electricity Act.

Thus, in the case of a conflict between the provisions of the Electricity Act and the Competition Act, the former would override because Section 174 of the Electricity Act would get attracted and section 175 of the Electricity Act would have to yield. The contention of the Appellant, that the Act also contained a non-obstante clause in Section 60 of the Act giving it an overriding effect, did not assist his case because the Electricity Act, 2003 was admittedly a later special statute and in the event of irreconcilable inconsistency between the Electricity Act and the Competition Act, the former would override even though the Competition Act contained the non-obstante clause in Section 60 of the Act.

3. Whether any competition law issue of unfair and discriminatory price in contravention of Section 4 of the Act, while computing or charging FSA, has been made out

Dealing with this issue, the COMPAT opined that as it lacked jurisdiction to try the case, the issue was only of academic. But however, upheld the view of the CCI that the appellant did not establish a prima facie case as price discrimination on the part of a dominant firm was not per se unlawful.

As DHBVN, charged differential rate depending upon consumption of electricity which actually translated into a higher rate for higher consumption was justified, on the objective criteria of consumption. Such variance in pricing was authorized by virtue of Section 62(4) of the Electricity Act. COMPAT thus held that the FSA charged at different rates based on the consumption of electricity was not unfair or discriminatory and could not be construed as abuse of dominant position u/s 4 of the Act.

COMPAT accordingly, dismissed the appeal.

2017-02-16

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The order was passed by Shri Rajeev Kher, Member and Smt. Anita Kapur, Member.

Advocate Rajat Agarwal appeared for the appellant whereas, Advocate Varun Pathak, Advocate Himangi Mehta and Advocate Pooja Nawal

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Anand Parkash Agarwal

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LSI Nature of issues

Principles of natural justice

CCI jurisdiction

Unfair/discriminatory pricing

LSI Judge Name

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Anand Parkash Agarwal

Dakshin Haryana Bijli Vitran Nigam

Haryana Electricity Regulatory Commission

State of Haryana

CCI

Advocate Rajat Agarwal

Power

4 - Abuse of dominant position

Advocates Varun Pathak, Himangini Mehta and Pooja Nawal

LSI Citation

LSI-1630-COMPAT-2017(NDEL)

LSI Judiciary Level

LSI City/Bench

LSI-1558-COMPAT-2017-(NDEL)-Prem Prakash.pdf

LSI Identifier

1629/1538

COMPAT: COMPAT upholds CCI order; PGCIL not dominant in relevant market

Anonymous — Tue, 02 May 2017 08:42:57 +0000

COMPAT: COMPAT upholds CCI order; PGCIL not dominant in relevant market Anonymous (not verified) Tue, 02/05/2017 - 14:12

Conclusion

COMPAT dismisses appeal filed by Prem Prakash (‘Appellant’), proprietor of Venus Testing & Research Laboratory challenging CCI’s order and case of dominance of abuse against Power Grid Corporation of India Ltd. (‘Respondent’/ ‘PGCIL’); Notes that PGCIL mandated selection of labs through a process of tendering and required accreditation with National Accreditation Board for Testing and Calibration Laboratories (‘NABL’); Further notes that Appellant company wasn’t entitled to receive testing jobs from PGCIL due to not fulfilment of prescribed criteria; Opines that if Appellant wasn’t in a position to secure a market for its services from the Respondent it wasn’t an end of the world as it could offer testing services for construction material, which was a very wide canvass of business within India; Holds that when PGCIL did not operate in the relevant market, Appellant had no case to prosecute that PGCIL abused its dominant position

2017-03-09

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The order was passed by Shri Rajeev Kher & Ms. Anita Kapur, Members.

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Prem Prakash vs. Competition Commission of India

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LSI Nature of issues

Determination of relevant product market

Determination of relevant geographic market

Vertical relationship

Unfair/discriminatory conditions

LSI Judge Name

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Prem Prakash

Competition Commission of India

Power Grid Corporation of India Ltd.

Laboratory testing services

4 - Abuse of dominant position

4(2) - Determination of abuse of dominant position

2(r) - Relevant market

2(s) - Relevant geographic market

2(t) - Relevant product market

3(4) - Agreements causing appreciable adverse effect on competition

LSI Citation

LSI-1558-COMPAT-2017-(NDEL)

LSI Judiciary Level

LSI City/Bench

LSI-1536-COMPAT-2017-(NDEL)-Karnataka film 6.4.2017 final 1 1 .pdf

LSI Identifier

1557/1474

COMPAT: Blocking telecast of films/serials in Kannada language, anti-competitive

Anonymous — Mon, 24 Apr 2017 10:00:59 +0000

COMPAT: Blocking telecast of films/serials in Kannada language, anti-competitive Anonymous (not verified) Mon, 24/04/2017 - 15:30

Conclusion

COMPAT holds that Karnataka Film Chamber of Commerce (‘Appellant’/ ‘KFCC’ a non-profit society), Karnataka Television Association (‘KTVA’/’Respondent 4’) and Kannada Film Producers Association (‘KFPA/Respondent 6’) acted in concert to indulge in anti-competitive practices by restricting market of dubbed films/serials in Kannada language in contravention to Sec. 3 of Competition Act, 2002 (‘the Act’); Taking note of specific instances of blocking telecast of dubbed TV serials such as Satyameva Jayate and Rani Laxmibai of Jhansi and exhibition of film “Koffi Shop” CCI held Appellant and Respondent 4 to 8 guilty of anti-competitive activities; Rejects Appellant’s plea that they were trying to protect local language, culture and artists, dismisses Appellant’s ‘specious’contention that ‘foreign language movies’ also meant movies dubbed in Kannada; Relies on SC ruling Co-ordination Committee of Artists and Technicians of W.B. Film and Television ; Upholding penalty imposed by CCI dismisses Appellant’s plea that penalty ought not to be levied as it been a non-profit organization was exempt from payment of taxes, holds that profitability or tax exempt status should not be considered while calculating penalty

Decision Summary

Karnataka Film Chamber of Commerce (‘Appellant’/’KFCC’) filed an appeal against the order passed by Competition Commission of India (‘CCI’). CCI had imposed penalty of Rs.16.825 lakhs on Appellant and of Rs.1.74 lakhs and Rs.1.68 lakhs was imposed on Karnataka Television Association (KTVA) and Kannada Film Producers Association (KFPA) respectively. The three association had limited and restricted the market of dubbed films/serials in Kannada language and that was in contravention of Section 3(1) read with Section 3(3)(b) of the Competition Act, 2002 (‘Act’). CCI further directed Appellant, KTVA and KFPA to cease and desist from indulging in practices found to be anticompetitive and to bring out a Competition Compliance Manual to educate their members about the competition law principles and play an active role in creating awareness among their members of the provisions of the Act through competition advocacy.

COMPAT observed that Appellant is an association of film producers, distributors and theatre owners and registered as a non-profit society under the Karnataka Societies Registration Act, 1960. Kannada Grahakara Koota (Respondent No. 1) and Shri Ganesh Chetan (Respondent No. 2 ) had alleged that Appellant had violated Section 19 (1) (a) of the Act by conducting anti-competitive practices and cartelization within the Karnataka Film and television industry. The complaint was filed was filed against KTVA, KFPA, Karnataka Film Directors Association (KFDA), Karnataka Chalanachitra Academy (KCA) and Karnataka Film Artists, Workers and Technicians Union( KFAWTU) along with the Appellant. Further, it was alleged that the market of films and television shows within the State of Karnataka was restricted due to the collective action of these associations, prohibiting telecasting of dubbed content from any other language into Kannada, and banning making, releasing and exhibiting of dubbed films. Specific instances of alleged blocking of telecast of dubbed TV serials “Satyameva Jayate” and Rani Laxmibai of Jhansi and exhibition of film “Koffi Shop”, were cited in this context.

Whether the Appellant being an Association of film producers, distributors and theatre owners was within the purview of Section 3 of the Act?

COMPAT held that in order to interpret Section 3 (Prohibition of agreements: Anti-competitive Agreements) of the Act, it was necessary to define ‘agreement’, ‘enterprise’ and ‘person’ as provided u/s 2 of the Act.

In reference to the first issue, COMPAT held that appellant was an association of producers, distributors, and exhibitors. These producers, distributors and exhibitors were undeniably persons as defined in Section 2 (l) of the Act. Further, these persons are certainly enterprises being engaged in activities as encompassed in Section 2(h) of the Act. The Appellant was, therefore, association of persons and its constituent members were enterprises operating in the same market.

COMPAT was of the view that any action by the Appellant was a joint action of its members with the association, as also joint action inter-se members, constituting an agreement entered into, practice carried on or decision taken by which can be subjected to appraisal to ascertain as whether there was any contravention of Section 3 of the Act.

COMPAT referred to CCI ruling in Motion Pictures Association vs. Reliance Big Entertainment Pvt. Limited wherein it was held that, ‘association of enterprise’ or ‘association of persons’ was covered under Section 3(3)(b) of the Act and that persons forming the association were certainly in the trade of identical goods or services and that association was representative of its members.

Whether the conduct of the Appellant was to be evaluated only in regard to the film industry in Karnataka or in regard to the television industry as well?

COMPAT stated that the rules and practices of the individual association amounted to an agreement between the association and members as also between inter-se members, particularly in view of the broad definition of the word ‘agreement’ in the Act. Further COMPAT held that film and television industry were not two entirely different product markets. COMPAT further stated that the television industry was also a route to monetize films. Films exhibited in the theatres and films telecast through the medium of television were certainly substitutable. Similarly, television shows could be adapted to a film format. Consumers sought entertainment and both films and television industry offered products to entertain, and consumers can make their choices based on their prices, characteristics etc. COMPAT referred to SC ruling in CCI vs. Co-ordination Committee of Artists and Technicians of W.B. Film and Television and others [LSI-1432-SC-2017-(NDEL)]where SC held that the sweep of the action is to be considered while determining the market.

Whether there was sufficient evidence on record to establish that an ‘agreement’ was entered into, or practice carried on or decision taken in contravention of Section 3, read with Section 3(3) (b) of the Act?

COMPAT noted that Sec. 3(3) (b) created a presumption that if an agreement or practice carried on or decision taken which limited or controlled production, supply, markets, technical development, investments or provision of services as anti-competitive then there was a presumption that it had an appreciable adverse effect on competition. Hence in the present case, CCI had passed an order referring to the interference by the Appellant in release of ‘Koffi Shop’ and in telecast of TV programme ‘Satyamev Jayate’ which were also mentioned in the minutes of the Emergency Executive Committee Meeting of the Appellant. COMPAT noted that the Appellant was also involved in the practice of preventing the release/telecast of dubbed films/TV serials in the State of Karnataka.

COMPAT observed that in regard to “Koffi Shop” Appellant had written the letter to the newspapers requesting them not to publish the advertisement pertaining to ‘Koffi Shop’, until they received instructions from them. COMPACT further held that the minutes showed that the Appellant and the members were jointly and systematically opposing the dubbed content and even decided to adopt agitational path.

COMPAT observed that in the minutes of the meeting the phrase ‘foreign language movies’ was mentioned which did not mean that movies dubbed in Kannada is specious. The matter deliberated in the meeting was screening of foreign language films which included all films in languages other than Kannada and at many places in the minutes the words ‘other language movies’ have been used. These films in ‘language other than Kannada’ would include films with content dubbed in Kannada. Hence, COMPAT held that restraint on dubbed content is consequent to an understanding and an arrangement of the Appellant with its constituents and of its constituents inter se.

COMPAT noted that the Appellant had not challenged the quantum of penalty. However, penalty was claimed to be unsustainable on the ground that it was not a profitable organisation and enjoyed exemption from payment of tax, and its income was not from the business of film production, distribution or exhibition, but only from collection of membership and rent accrued from the lease of its building. COMPAT opined that profitability or tax exempt status of a person contravening provisions of Section 3 of the Act, are not the factors to be considered for determining the average of the turnover i.e. receipts referred in Section 27(b) of the Act, with reference to which the penalty is to be calculated. Further, since the conduct of the Appellant resulting in contravention of Section 3 of the Act, was traced to the very existence of the Appellant as an association of enterprises, its receipts were appropriate basis for determining the quantum of penalty. Therefore, COMPAT did not interfere with imposition of penalty.

COMPAT thus dismissed the appeal.

Taxsutra/GSTsutra/LSI Note

SC in the matter of Co-ordination Committee of Artists and Technicians of W.B. Film and Television held that the act of co-ordination committee by barring dubbed TV serials from exhibition on TV channels in the State of West Bengal hinders competition in the market and it amounts to violation of section 3(3)(b) of the Competition Act. SC thus held that it was a case of depriving the consumers of exercising their choice under the garb of protecting languages. [LSI-1432-SC-2017-(NDEL)]

2017-04-10

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The order was passed by Shri Rajeev Kher and Anita Kapur (Members).

Advocates Balaji Srinivasan and K. Harshavardhan represented the Appellant whereas Advocates Aniruddha Deshmukh, Naveen Nath and Vanshdeep Dalmia represented the Respondent.

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Karnataka Film Chamber Of Commerce vs. Kannada Grahakara Koota

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Karnataka Film Chamber of Commerce

Advocates Balaji Srinivasan and K. Harshavardhan

Media & Entertainment

3 - Anti-competitive agreements

3(1) - Appreciable adverse effect on competition within India

3(3)(b) - Limits or controls supply etc

3(3) - Enterprises having appreciable adverse effect on competition

2(l) - Person

2(h) - Enterprise

Advocates Aniruddha Deshmukh, Naveen Nath and Vanshdeep Dalmia

LSI Citation

LSI-1536-COMPAT-2017-(NDEL)

LSI Judiciary Level

LSI City/Bench

LSI-1505-COMPAT-2016-(NDEL)-EssCee Securities vs DLF Universal 1 .pdf

LSI Identifier

1535/1447

COMPAT: Overrules CCI; Affordable housing providers’ market not relevant for “Luxury Apartments”

Anonymous — Mon, 10 Apr 2017 10:55:29 +0000

COMPAT: Overrules CCI; Affordable housing providers’ market not relevant for “Luxury Apartments” Anonymous (not verified) Mon, 10/04/2017 - 16:25

Conclusion

Competition Appellate Tribunal (‘COMPAT’) repudiates Competition Commission of India’s (‘CCI’) classification of ‘relevant product market’ in the case of Ess Cee Securities Pvt. Ltd. and Signature Securities Pvt. Ltd. (‘Appellants’); CCI had held that relevant market for the purpose of high-end/ luxury flats was at par with economic and low-income group flat purchasers; On noting that the Appellants had booked the flat with Respondent (DLF Universal Ltd.) based on its location, cost profile, various other facilities associated with the apartment holds that Appellants sought to buy high-end luxury apartments and not any house in Delhi, thus classifies relevant market as ‘the provision of services relating to development and sale of high-end luxury residential apartments in Delhi’; Opines that apartment by Delhi Development Authority (DDA) for residential accommodation to general public at affordable prices cannot be a part of the relevant market in Appellant’s case, also takes note of CCI’s earlier decision in Belaire Owner’s Association wherein DLF Ltd. (appellant in that case) had contended that DDA apartments cannot be termed as luxury; Thus remits the matter to CCI for deciding whether Respondent was holding a dominant position in the relevant market to contravene provisions of Sec. 4(2) of the Competition Act, 2002

Decision Summary

Ess Cee Securities Private Limited and Signature Securities Private Limited (‘Appellants’) appealed to Competition Appellate Tribunal (COMPAT) against the order passed by Competition Commission of India (CCI). Appellants had booked apartments at DLF Universal Limited and DLF Home Developers Limited project, Capital Greens Phase-III (Respondent), which was launched in 2010. Appellants filed information with the CCI post receipt of information from Respondents on February 5, 2013 wherein it was stated that Respondents had received building plan approvals from the competent authority. It was then appellants got to know that the Respondents had no intention to give the possession of their flats in 33 months.

CCI held that the relevant market in the instant case was ‘provision of services relating to development and sale of residential apartment in Delhi’. Further CCI stated that DLF was not the only real estate developers engaged in the provision of services relating to development and sale of residential apartment and that there were many other developers like Delhi Development Authority (DDA), Ansal API, Umang Realtech, Emaar Group, CGHS Group, Parsvnath, etc. which posed competitive constraints to DLF in the relevant market. CCI thus held that the Respondent wasn’t holding a dominant position in the market.

Appellant alleged 2 principal issues with respect to CCI order before the COMPAT.

Whether CCI took the right approach in not delineating luxury apartments in Delhi as the relevant market instead delineating provision of services relating to development and sale of residential apartment in Delhi thereby broad basing the market;
In its consideration of the alternatives available to the informant whether the CCI was right in including DDA as alternative supplier of apartments which the informant would have liked to buy.

COMPAT observed that CCI did not consider relevant product market in terms of the Appellant. Appellant had mentioned they had booked luxury apartments and therefore, their choice for selection of apartments was limited.

Appellants relied on Belaire Owner’s Association v. DLF Ltd. and Ors., Case No. 19/2010 wherein CCI had explained “high end” or “luxury” residential accommodation while ruling that the most important determinant was the price of the dwelling unit within a specific geographical area that constituted a distinct category. In addition, CCI took note of appellants contention in reference to Belaire's case that a palace could not be a substitute for a studio apartment or even a row-house and vice versa and so, there could be no hard and fast criteria for determining concepts like “luxury” or “high-end” but believed that just because no specific distinguishing criteria existed, it did not mean that there was no distinction between “high-end” and “economy” or “low-end” residential units.

2016-12-09

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The order was passed by Justice G.S. Singhvi (Chairman), Shri Rajeev Kher and Ms. Anita Kapur (Members).

Advocates Rajshekhar Rao, Chaitanya Puri, Shri Nishit Agarwal and Varun represented Appellants whereas Senior Advocate Krishnan Venugopal along with Advocates Manika Brar and Anandh Venkataramani represented the Respondent.

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Ess Cee Securities Pvt. Ltd. vs. Competition Commission of India

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LSI Nature of issues

Determination of relevant product market

Determination of relevant geographic market

LSI Judge Name

Justice G. S. Singhvi

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Ess Cee Securities Pvt. Ltd.

Signature Securities Pvt. Ltd.

Competition Commission of India

DLF Universal Ltd.

DLF Home Developers Ltd.

Advocates Rajshekhar Rao, Chaitanya Puri, Shri Nishit Agarwal and Varun

Real Estate

4 - Abuse of dominant position

4(2) - Determination of abuse of dominant position

2(r) - Relevant market

2(s) - Relevant geographic market

2(t) - Relevant product market

Senior Advocate Krishnan Venugopal along with Advocates Manika Brar and Anandh Venkataramani

LSI Citation

LSI-1505-COMPAT-2016-(NDEL)

LSI Judiciary Level

LSI City/Bench

LSI-1467-COMPAT-2017-(NDEL)-DG IR vs Gujarat Ambuja and others 1 .pdf

LSI Identifier

1504/1416

COMPAT: “Price parallelism” not definitive proof; Mandates evidence to evidence cartelization

Anonymous — Wed, 29 Mar 2017 04:03:17 +0000

COMPAT: “Price parallelism” not definitive proof; Mandates evidence to evidence cartelization Anonymous (not verified) Wed, 29/03/2017 - 09:33

Conclusion

COMPAT reverses CCI orders, holds that Gujarat Ambuja Cements Ltd. & other cement companies (Respondents) did not preplan any cartel activity; Holds that Director General of Investigation (Applicants) had inadequate evidence to prove that Respondents had adopted restrictive trade practice by limiting the supplies of cement in Hyderabad region and had created consequent shortage in order to increase the price of cement to abnormal level; Negates the allegation that cement leaders declared ‘despatch holidays’ for nil supply days with the intention to affect the flow of cement supply in violation of Sec 2(o) and 33 of the MRTP Act; Notes that though the prices had increased after the dispatch holidays there was no price parallelism so far as there was consistency in the price rise and the rate at which the prices had increased; Further observes that Respondents’ combined market share was 13% which couldn’t adversely impact availability of cement in the market; Refers to various MRTPC judgment, ITC Limited wherein it was held that, “in the absence of any direct evidence of cartel and the circumstantial evidence not going beyond price parallelism without there being even a shred of evidence in the proof of any plus factor to bolster the circumstances of price parallelism, we find it unsafe to conclude that the respondents indulged in any cartels for raising the price “

2017-02-16

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The order was passed by Shri Rajeec Kher and Anita Kapur

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The Director General of Investigation and Registration vs. Gujarat Ambuja Cements Ltd.

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LSI Nature of issues

Cartelization

Limiting/controlling supply

Price parallelism

Cross-examination of witnesses

LSI Judge Name

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The Director General of Investigation and Registration

Gujarat Ambuja Cements Ltd.

Associated Cement Companies Ltd.

Grasim Industries Ltd.

Cement

LSI Citation

LSI-1467-COMPAT-2017-(NDEL)

LSI Judiciary Level

LSI City/Bench

LSI-1458-COMPAT-2017-(NDEL)-Coal India.pdf

LSI Identifier

1466/1383

COMPAT: Unilateral forfeiture clause constitutes abuse of dominance u/s 4 of the Competition Act

Anonymous — Mon, 27 Mar 2017 07:55:49 +0000

COMPAT: Unilateral forfeiture clause constitutes abuse of dominance u/s 4 of the Competition Act Anonymous (not verified) Mon, 27/03/2017 - 13:25

Conclusion

Competition Appellate Tribunal (‘COMPAT’) upholds the Competition Commission of India’s (CCI) order, Coal India Ltd. (CIL / Appellant) through its subsidiaries holds 94.27% share in the relevant market and operates independent of market forces thereby enjoying undisputed dominance in the relevant market [i.e. sale of non-coking coal under the spot e-auction scheme (‘the scheme’)] and thus abuses its dominant position by imposing unreasonable conditions on the bidders/buyers in contravention to the provisions of the Competition Act, 2002; Observes that conditions imposed by CIL of forfeiting Rs. 500 per tonne if bidders/buyers of coal did not lift the coal, whereas, no penalty was paid by CIL on its failure to supply coal and the refund of earnest money after 30-60 days due to cumbersome procedure violated Sec. 4; Rejects CIL’s plea that since no case of abuse of dominant position was made out there was no need to dwell on the issues of relevant market, also negates the Appellant’s argument that Director General (DG) erred in classifying ‘relevant geographic market’ as India as against “global in nature”; Notes that CIL failed to prove as to how imported coal can be regarded as ‘interchangeable or substitutable’ as against spot e-auction scheme; Also refutes Appellant’s plea that its market position was a result of statute and not market practice to hold that dominance even if created statutorily, is within the purview of the Act

Decision Summary

Respondent No. 2, Mr. Bijay Poddar (Informant) filed information with CCI in July, 2013 seeking investigation under the Competition Act, 2002 with regards to the scheme of the Coal India Ltd (CIL/ Appellant) Appellant, alleged that Appellant and its subsidiaries in terms of clause 9.2 of the Scheme, forfeited Rs. 500 per tonne if bidders/buyers of coal and did not lift the coal, while they did not pay the penalty, if they failed to supply coal. It was also alleged that earnest money was refunded after 30-60 days due to cumbersome procedure. It was therefore contended that foreclosure clause was arbitrary, illegal and amounted to misuse of monopolistic power and the Scheme being one sided, was illegal.

The CCI on consideration of the market share (94.27%) of the Appellant and its subsidiaries in the entire e-Auction and in light of the market structure, held that their dominance in the relevant market was beyond any doubt. The CCI rejected the argument of the Appellant that it was not in a dominant enterprise in the wider global market and even in India, as it was a creation of statute and lacked autonomy and had social obligations. In the CCI’s assessment, the Appellant had, even within the overarching policy and regulatory environment, sufficient flexibility and functional independence had carried out its commercial and contractual affairs.

The CCI after holding the Appellant to be dominant in the relevant market, held it guilty of abusing its dominant position, because the Scheme had disturbed the normal contractual equilibrium inasmuch as uneven obligations were created thereunder whereby a buyer was saddled with penalty by way of forfeiture of EMD for non-lifting of coal after successful participation in the e-Auction, while no corresponding penalty was provided if despite acceptance of the bid, the Appellant failed to deliver coal. CCI held that, such a stipulation in the Scheme was a result of market power exercised by the Appellant and had fallen afoul of the provisions of Section 4(2)(a)(i) of the Competition Act, 2002, being ex-facie unfair.

The COMPAT while dealing with the issues, rejected the contention of the appellant to declare that it was not necessary for the COMPAT to go into the question of relevant market or the issue of dominance as no case of abuse or anti-competitive agreement had been made out, relied on the decisions of the European Commission and others. The COMPAT in its order stated that unless an enterprise enjoyed a dominant position in the relevant market, its conduct cannot be subject to any inquiry to ascertain abuse. COMPAT thus held that finding of dominance in the relevant market was a necessary pre-condition before applying section 4 of the Act.

The COMPAT while dealing with the second issue of ‘determination of relevant market’ opined that ‘relevant market’ had to be determined with reference to the ‘relevant product market’ or the ‘relevant geographic market’ or with reference to both and hence, concluded that in the current matter the relevant market was ‘Spot e-Auction of non-coking coal in India’.

COMPAT also referred to the definition of ‘consumer’ as defined in the Act, to mean a person who purchases goods for “resale, or for any commercial purpose or for personal use”. Therefore, a trader buying coal in e-Auction was also a consumer.

COMPAT relied on the submission made by Mr. Mukharjee , General Manager, CIL that e-Auction had been introduced to facilitate all section of coal buyers to buy coal through a simple transparent and consumer friendly system, where very often the price offered through spot e-Auction was lesser than open market price.

COMPAT rejected Appellant’s argument that the Spot e-Auction Scheme and the Forward e-Auction Scheme should be considered as the same for the purposes of relevant market on the differentiation that that actual users as well as traders can bid under the Spot e-Auction Scheme while Forward e-Auction Scheme is confined to the buyers who obtain coal for their own usage and is not available to the traders.

Further COMPAT negated the argument of ‘countervailing buying power’ of the Appellant on the ground that the Appellant failed to prove that the customers of the Appellant had any bargaining power or could exercise any constraint on the Appellant’s power to impose conditions, even if those were exploitative in nature.

COMPAT dealt with the third issue which pertained to one sided clause 9.2 of the Scheme, which imposed unfair condition of forfeiture of earnest money deposited (EMD) for non-performance of successful bid within the specified period but there was no clause for providing compensation to the successful bidder if the Appellant failed to supply coal. COMPAT agreed with the CCI that, such clause disturbed the normal contractual equilibrium and the uneven obligations were a result of market power exercised by the Appellant and was thus unfair.

COMPAT dealt with the issue of whether the deposition of Shri Mukherjee recorded without permitting his legal representative to accompany him, was in violation of the principles of natural justice and required annulment. COMPAT in its decision held that appellants did not question the accuracy of the submissions nor was it argued that any crucial fact as stated by Mr. Mukharjee had been omitted also, the appellants had failed to specify in what way, the presence of the counsel would have assisted Mr. Mukharjee in responding to his queries raised by the DG and as the principle of natural justice cannot be straightjacketed and the violation claimed by the appellant was only in form and not in substance and opined that the CCI had passed a reasoned order and that the appellant had failed to demonstrate any prejudice and miscarriage of justice, arising from the absence of the counsel.

2017-03-15

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The order was Shri Rajeev Kher and Anita Kapur.

Advocates Rajshekhar Rao, Yaman Verma, Prateek Bhattacharya and Prateek Bhattacharya represented Appellant whereas Senior Advocates Pallav Shishodia represented the Respondent

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M/s. Coal India Ltd. vs. Competition Commission Of India

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LSI Nature of issues

Determination of relevant product market

Determination of relevant geographic market

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Coal India Ltd.

Competition Commission of India

Bijay Poddar

Advocates Rajshehar Rao, Yaman Verma,Prateek Bhattacharya & Gauri Puri

Coal

4 - Abuse of dominant position

4(2)(a)(i) - Unfair or discriminatory purchase/ sale conditions

Senior Advocate Pallav Shishodia along with Advocates Rishad Chowdhury and Asiya Khan

LSI Citation

LSI-1458-COMPAT-2017-(NDEL)

LSI Judiciary Level

LSI City/Bench

LSI-1367-COMPAT-2016-(NDEL)-Gunny traderes association.pdf

LSI Identifier

1457/1372

COMPAT: Dismisses ‘defective’ appeal for want of correction despite intimation more than year ago

Anonymous — Tue, 14 Feb 2017 05:23:03 +0000

COMPAT: Dismisses ‘defective’ appeal for want of correction despite intimation more than year ago Anonymous (not verified) Tue, 14/02/2017 - 10:53

Conclusion

COMPAT dismisses application filed after 8 months for recalling appeal dismissal order and reinstatement of appeal; Notes that Tribunal had sent 7 letters to applicant to cure the defect in the appeal in accordance with its Rules, however Applicant did not bother to remove the defects for more than a year; Tribunal points out that though the case was taken up twice for admission, no one appeared on behalf of the appellant, giving an impression that the appellant is not interested in prosecuting the matter; Relies on Guman Singh vs. State of Rajasthan & Others ruling wherein SC had considered a case akin to that of the applicant, and dismissed writ petition of similar situated officer as he had kept quiet and allowed officiating promotions of all officers despite being aware of challenge by Guman Singh to promotion of 4 officers; Ultimately dismisses in default, the appeal as well as interim order filed for stay of the order passed by the Commission

2016-11-15

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The order was passed by Justice G.S Singhvi (Chairman) and Shri Rajeev Kher (Member).

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Gunny Trades Association vs. Indian Sugar Mills Association

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Anti-competitive Agreements

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Justice G. S. Singhvi

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Gunny Trades Association

Indian Sugar Mills Association

National Federation of Cooperative Sugar Factories Pvt. Ltd.

All India Flat Tape Manufacturers Association

Competition Commission of India

Sugar

3 - Anti-competitive agreements

3(1) - Appreciable adverse effect on competition within India

3(3)(a) - Determines prices

3(3)(b) - Limits or controls supply etc

LSI Citation

LSI-1367-COMPAT-2016-(NDEL)

LSI Judiciary Level

LSI City/Bench