2013 (2) TMI 534 - Commission - Indian Laws

Section 4 of the Competition Act, 2002 - abuse of dominant position - Informant claimed to be a businessman who booked a commercial office space with DLF opposite party under Commercial Office Space Buyer s Agreement including completion and possession of the complex within 36 months from the date of execution of the agreement but no sign of construction as against promises made by opposite party found when informant visited the site - Informant charged OP with alleging contravention of section 4 abusing its dominant position by making him sign one-sided agreement and delaying project - Held that - The relevant market proposed by the informant, namely real estate developer in Delhi and Gurgaon , seems incorrect. Though the OP may have a PAN India presence but the geographic conditions prevailing in different parts of the country require determination of relevant geographic market in context of that area.Gurgaon and Delhi are different relevant geographic markets for the purposes of case at hand. Gurgaon developed in last few years in a major way and various big projects were started by the OP Group in that area. However, in Delhi, opposite party is just one of the real estate developers. here were many other real estate developers in Delhi who offered similar commercial/office space. The informant in the present case was desirous of booking an office space. Therefore, the relevant market in the present case will be market for development of commercial/office space in the region of Delhi . Section 19(4) of the Act states that the Commission needs to consider various factors stated under that section while assessing whether an enterprise enjoys a dominant position or not and as per the information available in public domain, it is clear that the OP was not the only real estate developer offering commercial office space in Delhi. There are other real estate developers as well, e.g., Ansal API, Unitech, BPTP, Omaxe, Parsavnath etc. Presence of other real estate developers offering commercial office space also indicates that the informant was not dependent upon the opposite party for provisioning of an office space. None of the factors stated under section 19(4) of the Act seem to support informant s plea of dominance of opposite party. Therefore, the opposite party does not appear to be dominant in the relevant market of development of commercial/office space in the region of Delhi Thus plea regarding abuse of dominance in instant case rejected a as the OP was not dominant in the relevant market determined by the Commission - there does not exist a prima facie case under section 4 to order DG investigation as allegations related to unfair trade practices, deficiency in services etc. may be pleaded at other appropriate forums, if the informant so desires, the same being not within the ambit and jurisdiction of the Commission - Commission deems it fit to close the proceedings in the instant case under section 26(2).

Issues Involved:
1. Alleged contravention of Section 4 of the Competition Act, 2002.
2. Determination of the relevant market.
3. Assessment of dominance in the relevant market.
4. Examination of abuse of dominant position.
5. Prima facie case for ordering an investigation.

Detailed Analysis:

1. Alleged Contravention of Section 4 of the Competition Act, 2002:
The informant, a businessman, filed a complaint against DLF Commercial Complexes Ltd. (the OP) under Section 19(1)(a) of the Competition Act, 2002, alleging contravention of Section 4 of the Act. The informant claimed that the OP abused its dominant position by enforcing arbitrary, unfair, and onerous clauses in the standard agreement for the allotment of commercial office space.

2. Determination of the Relevant Market:
The Commission examined the relevant market by considering Section 2(r), 2(t), and 2(s) of the Act, which define relevant market, relevant product market, and relevant geographic market, respectively. The informant proposed 'real estate developer in Delhi and Gurgaon' as the relevant market. However, the Commission determined that Delhi and Gurgaon are distinct geographic markets. The relevant market was identified as 'development of commercial/office space in the region of Delhi' due to the presence of multiple real estate developers offering similar services in Delhi.

3. Assessment of Dominance in the Relevant Market:
The Commission assessed whether the OP was dominant in the relevant market as per Section 19(4) of the Act. It was found that the OP was not the only real estate developer offering commercial office space in Delhi, with other developers like Ansal API, Unitech, BPTP, Omaxe, and Parsvnath also present. The presence of these competitors indicated that the informant was not dependent solely on the OP. Therefore, the OP was not considered dominant in the relevant market of 'development of commercial/office space in the region of Delhi.'

4. Examination of Abuse of Dominant Position:
Given that the OP was not dominant in the relevant market, the Commission did not proceed with examining the allegations of abuse of dominance. The Commission noted that the allegations related to unfair trade practices and deficiency in services might be addressed in other appropriate forums, as they were not within the Commission's jurisdiction.

5. Prima Facie Case for Ordering an Investigation:
The Commission concluded that there was no prima facie case under Section 4 of the Act to warrant a DG investigation. Consequently, the proceedings were closed under Section 26(2) of the Act.

Dissenting Judgment:
A dissenting opinion was provided, which emphasized the concept of 'captive consumer' and the high switching costs that prevent consumers from substituting or interchanging services once they have entered into an agreement with a developer. The dissenting opinion delineated the relevant market as 'Provision of services for the development and sale of commercial space in Najafgarh area of Delhi' and concluded that the OP held a dominant position in this market. It was argued that the OP abused its dominance by imposing harsh and one-sided terms in the agreement, thereby contravening Section 4(2)(a)(i), (ii), and 4(c) of the Act. The dissenting opinion recommended a DG investigation into the matter.

Conclusion:
The majority decision of the Commission found no prima facie case of abuse of dominance by the OP in the relevant market of 'development of commercial/office space in the region of Delhi,' leading to the closure of the proceedings. However, the dissenting opinion identified a relevant market in Najafgarh and concluded that the OP abused its dominant position, recommending an investigation.

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