2024 (10) TMI 1467 - AT - Companies Law

Principle of res judicata - Department of Expenditure (DOE) is an 'enterprise' under Section 2(h) of the Competition Act, 2002 - Office Memorandum (OM) issued by DOE constitutes an agreement under Section 3(4) and Section 3(1) of the Act or not - HELD THAT - The issue as to whether the Respondent No. 2 is an enterprise and OM 1 is an agreement has already been decided by the Respondent No. 1 in case no. 39 of 2010 decided on 15.09.2010 holding that neither the Respondent No. 2 is an enterprise within the meaning of Section 2(h) nor OM1 is an agreement between Respondent No. 2, 3 and 4. It is pertinent to mention that the Hon ble Supreme Court in CCI Vs. Co-Ordination Committee of Artists and Technicians of W.B. Film and Television and Ors. 2017 (3) TMI 1692 - SUPREME COURT has held that the Department of Expenditure, Ministry of Finance, Government of India, cannot be considered or regarded as an enterprise in terms of Section 2(h) of the Act, 2002 in relation to the Office Memorandum dated 24.03.2006. Thus, it is very well proved that the Appellant has approached the Respondent No. 1 by filing second information on the same facts and circumstances against the same opposite parties with the same prayer which has already been declined in the first information filed by the Appellant and the order of the CCI was tested and upheld by the Appellate Authority when the appeal of the Appellant was dismissed and no further appeal by the Appellant was carried to the Hon ble Supreme Court which seal the fate of the Appellant in so far as this litigation is concerned. In this view of the matter the salutary principle / legal maxim that nemo debet lis vexari pro una et eadem causa would spring in to the action that no man should be vexed twice for the same cause which has been adjudicated in the present case by the Appellant because even if it is presumed that the economic activities are dynamic, as stated by the Appellant, the fact remains that the two courts have already held that the Respondent No. 2 is not an enterprise and OM1 is not an agreement inviolation of Section 3(4) of the Act, therefore, these issues cannot be reagitated and the court cannot be called upon to decide the same by passing a lengthy judgment and the wasting time which may be used for disposal of a genuine case, therefore, the present appeal is found without any merit. Appeal dismissed.

Summary

Issues Involved:

1. Whether the Department of Expenditure (DOE) is an 'enterprise' under Section 2(h) of the Competition Act, 2002.
2. Whether the Office Memorandum (OM) issued by DOE constitutes an agreement under Section 3(4) and Section 3(1) of the Act.
3. Applicability of the principle of res judicata to the present case.

Detailed Analysis:

1. Whether DOE is an 'enterprise':

The Appellant argued that DOE should be considered an 'enterprise' as it controls an economic activity by mandating the use of specific travel agents, thereby foreclosing the market for private agents. They referenced the Supreme Court's decision in CCI Vs. Coordination Committee of Artists and Technicians of W.B Film and Television, asserting that any entity engaging in economic activity qualifies as an enterprise under the Act. However, the Tribunal noted that DOE's principal activities are policy-making and interfacing with ministries, not commercial in nature. Therefore, DOE cannot be regarded as an 'enterprise' under Section 2(h) of the Act, as its actions are manifestations of government policy rather than economic activities.

2. Whether the OM constitutes an agreement:

The Appellant alleged that the OM issued by DOE, which restricts government officials to using only certain travel agents, constitutes an anti-competitive agreement under Section 3(4) and Section 3(1) of the Act. The Tribunal observed that there is no vertical relationship between DOE and the travel agents, as DOE does not participate in the production chain. The OM is an internal administrative decision, not an economic agreement, and thus does not contravene Section 3 of the Act. The Tribunal emphasized that government policy decisions, such as choosing specific service providers, do not equate to anti-competitive agreements.

3. Applicability of res judicata:

The Respondents argued that the principle of res judicata applies, as the issues raised by the Appellant had been previously adjudicated and dismissed by both the CCI and the Appellate Authority. The Tribunal agreed, noting that the Appellant's earlier challenge to the OM was dismissed, and no further appeal was pursued, rendering the decision final. The Tribunal reiterated that litigation must come to an end, and the same issues cannot be re-litigated, emphasizing the legal maxim "nemo debet lis vexari pro una et eadem causa," meaning no one should be vexed twice for the same cause.

Conclusion:

The Tribunal concluded that the appeal lacked merit, as the issues had already been decided, and the DOE is not an enterprise under the Act. The OM does not constitute an anti-competitive agreement, and the principle of res judicata bars re-litigation of the same issues. Consequently, the appeal was dismissed, and the Appellant was ordered to pay costs of Rs. 5 lacs to be deposited in the Prime Minister Relief Fund.