2013 (5) TMI 9 - Commission - Companies Law

Informant avail Loan at the rate of 5.7% - Informant fell in defaults and therefore his loans were adjusted at the rate of 9% - as per informant respondent was charging excessive interest at the rate of 9% and the agreement which was got signed under the duress and he was actually asked to sign on the dotted lines with the attitude of take it or leave it Abuse of dominance position - Contravention of Section 4 of the Act Held that - Commission has gone thoroughly into the report of the DG and has found fault with the finding of the DG that the respondent was in a dominant position. The CCI found that there were number of entities both in public and private sector providing finances for the commercial vehicles throughout the country and as such market share of 8% could not be a pointer to the respondent enjoying a dominant position in the relevant market. Thus, the CCI has dismissed the matter suggesting that there has been no contravention of either Section 3 or 4 of the Act. As for the matter of interest charged, the CCI was not expected to examine the rates of interest or as to whether the interest was excessively charged unless the CCI came to the conclusion that this was nothing but the abuse of the dominance. Appeal is dismissed.

Issues:
1. Relevant market definition by Director General and Competition Commission of India (CCI).
2. Allegations of excessive interest rate and duress in obtaining the loan.
3. Dominant position of the respondent in the market.
4. Lack of evidence to establish dominance.
5. Allegation of new agreement signed under duress.
6. Examination of interest rates by CCI.
7. Dismissal of the Appeal.

Analysis:

1. The dispute involved a small commercial vehicle owner who obtained finance from Shriram Transport Finance Company. The Director General initially defined the relevant market as "provision of services for financing pre-owned heavy commercial vehicles by non-banking financial corporation." However, the CCI corrected this to "the provision of services for financing commercial vehicles by non-banking finance company in India."

2. The informant alleged that the respondent charged excessive interest at 9% and forced the informant to sign the agreement under duress. The CCI was informed that the agreement was signed with a "take it or leave it" attitude.

3. The CCI examined the respondent's market position and found that the respondent did not hold a dominant position. Despite the DG's observation of a 25% market share in pre-owned vehicles finance and 8% in new truck finance, the CCI noted the presence of numerous entities providing commercial vehicle finance, leading to the dismissal of the case.

4. The learned counsel argued that the CCI erred in defining the relevant market and determining the respondent's dominance. However, the CCI's decision was upheld as the informant failed to provide evidence of the respondent's dominance in the market.

5. The allegation of signing a new agreement under duress was found to lack basis, with no evidence presented to support the claim. The absence of material showing that banks do not finance commercial vehicles further weakened the argument.

6. The CCI was not required to assess interest rates unless it amounted to an abuse of dominance. Since the respondent was not found to be dominant, the issue of excessive interest rates was deemed irrelevant by the CCI.

7. Ultimately, the appeal was dismissed, affirming the CCI's judgment in the matter. The CCI's decision was upheld based on the lack of evidence supporting the allegations and the absence of dominance by the respondent in the relevant market.

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