2013 (2) TMI 507 - AT - Indian Laws

Breach of provisions under Section 4 of Competition Act, 2002 - abused of dominance position - Appellant-company was engaged in development of telecommunication networks, security systems, display systems and traffic management systems filed information against AAI complaining that it was abusing its dominant position by specifying a particular technology, i.e., hydraulic bollards, in its procurement tender invitation notice for bollards, and, therefore, creating technical entry barriers for other type of bollards like one which were being produced by appellant-company - Held that - Tribunal cannot accede to any of the prayers in the information, as it is not for this Appellate Tribunal to re-write the tender conditions. It is also not for this Tribunal to frame the policies of the bodies like Airport Authority of India. Lastly, it is also not for this Tribunal to direct the CCI to address it to Vigilance Commission. The contention raised by informant cannot be accepted as that in requiring specific type of Bollards i.e. Hydraulic operated bollards the AAI has in any way breached any of the provision of section 4. The AAI was acting in its capacity as a consumer and as argued by the representative for the AAI it was equipped with technical committee to advise the AAI for a purchase of particular type of bollards. It cannot be imagined that a body like AAI was not equipped with the technical advice and would be acting without any such technical assistance. Therefore, if the AAI had a free choice to purchase a particular type of commodity, its hands could not be tied by taking the recourse to the competition act and the provisions there under. After all in the market the consumer would have to be given consumers dew i.e. basically his choice. The contention raised by appellant therefore, rejected. The argument of Appellant cannot be accepted that AAI was a dominant purchaser and had abused its dominance. In fact for the purposes of deciding the dominance, both the product market as well as geographical market are to be considered and insofar as the product market is concerned, it related to all the kinds of bollards whether hydraulic operated or otherwise. It is commonly known that bollards are used everywhere. The bollards are used even for the entry into the star hotels. They are used even for controlling the traffic. They are used everywhere where security and safety is required to be maintained. Therefore, there is nothing relevant about a particular type of bollards. They are required by not only AAI but by number of other institutions. Therefore, it cannot be said that the AAI would be a dominant player. Therefore the market to be only the five airports named in the notice inviting tender cannot br restricted. Once the AAI held not to be in a dominant position, there would be no question of going further into the breach or otherwise of Section 4 of the Act.

Issues Involved:
1. Alleged anti-competitive action by Airport Authority of India (AAI).
2. Abuse of dominant position by AAI.
3. Imposition of unfair and discriminatory conditions in tender notices.
4. Creation of technical entry barriers by AAI.
5. Compliance with Section 4 of the Competition Commission Act, 2002.

Detailed Analysis:

1. Alleged Anti-Competitive Action by AAI:
The appellant, Kanazia Systems Pvt. Ltd., challenged the order of the Competition Commission of India (CCI) under Section 26(2) of the Competition Commission Act, 2002. The appellant alleged that AAI's actions in floating and subsequently canceling a tender notice for procurement and installation of bollards, and then issuing a new tender with different conditions, were anti-competitive. The appellant argued that these actions created an unfair competitive environment and favored certain suppliers over others.

2. Abuse of Dominant Position by AAI:
The appellant claimed that AAI, being a large public sector undertaking, abused its dominant position by specifying a particular technology (Hydraulic Bollards) in its procurement tender, thereby creating technical entry barriers for other types of bollards produced by the appellant. The CCI, however, found no evidence that AAI was a dominant buyer of bollards in India, as bollards were required by various organizations, not just AAI. Therefore, AAI could not be considered a dominant purchaser in the relevant market.

3. Imposition of Unfair and Discriminatory Conditions in Tender Notices:
The appellant pointed out differences between the terms and conditions in the two tender notices floated by AAI. The first notice did not specify the requirement for Hydraulic Bollards, while the second notice did, along with additional conditions for Indian firms associated with foreign manufacturers. The CCI observed that the conditions laid down by AAI were uniformly applicable to all parties and did not constitute unfair or discriminatory terms.

4. Creation of Technical Entry Barriers by AAI:
The appellant argued that by specifying Hydraulic Bollards in the second tender notice, AAI created technical entry barriers, excluding other technologies such as motorized electro-mechanical bollards. The CCI, however, held that AAI was acting within its rights as a consumer to specify its requirements based on technical advice. The Tribunal agreed, stating that requiring a particular type of bollard did not create entry barriers for other manufacturers, as every consumer has the right to choose based on their needs and requirements.

5. Compliance with Section 4 of the Competition Commission Act, 2002:
The CCI and the Tribunal found no violation of Section 4 of the Act. The Tribunal emphasized that AAI, as a consumer, had the freedom to specify its requirements and that this did not amount to creating entry barriers or abusing a dominant position. The Tribunal also rejected the appellant's argument that the relevant market should be limited to airports, noting that bollards are used in various sectors, not just airports.

Conclusion:
The Tribunal dismissed the appeal, upholding the CCI's order. It concluded that AAI's actions did not breach any provisions of Section 4 of the Act, and AAI was not a dominant player in the relevant market. The Tribunal also stated that it was not within its jurisdiction to re-write tender conditions or frame policies for bodies like AAI.

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