2024 (11) TMI 947 - CCI - Companies Law

Unlawful seizure of shares and the monopolization of the cable TV network business in Chhattisgarh by the Opposite Parties - contravention of Sections 3 and 4 of the Competition Act, 2002 - HELD THAT - As regards contravention of Section 3 of the Act, the Commission notes that the provisions of Section 3(1) of the Act read with Section 3(3) thereof have no manner of application in the factual matrix of the present case as Section 3(3) of the Act requires two or more enterprises engaged in identical or similar trade of goods or provision of services and even if they are not engaged in identical trade, they must be presumed to be part of an agreement if they participate or intend to participate in furthering such an agreement. Looking at the relationship among OPs and the facts and circumstances of the case, as detailed above, it is evident that provisions of Section 3(3) of the Act are not applicable. Further, the Commission is of the view that, for the applicability of Section 4 of the Act and the examination of contravention thereof, it may be axiomatic to define a relevant market and assess the dominance of the entity alleged to be abusing its dominant position in such market. However, considering the facts and circumstances of the case and having regard to the abuses as alleged, the Commission does not find it imperative to define a precise relevant market in the instant matter. Furthermore, the Commission notes that the Informants have alleged violation of Section 4 of the Act against all the OPs. The Commission observes that it is a settled position that the provisions of the Act do not provide for inquiry into the cases of joint/collective dominance. Accordingly, no case of contravention under Section 4 of the Act has been established. The Commission notes that for the aforesaid reasons, it is unnecessary to delve deeper into the allegations. While the grievances raised by the Informant may give rise to a dispute, however, the Commission is not the right forum for adjudication of the same. The Commission is of the opinion, prima facie, no case of contravention of provisions of Section 3 and Section 4 of the Act is made out and accordingly, the Information filed against OPs is directed to be closed forthwith in terms of the provisions of Section 26(2) of the Act - no case for grant of relief(s) as sought under Section 33 of the Act arises and the prayer for the same is also rejected.

Summary

Issues:
Alleged contravention of Sections 3 and 4 of the Competition Act, 2002 by the Opposite Parties (OPs).

Analysis:
The Informants, M/s Vande Mataram Cable TV Network and Jaipal Singh Gulati, filed an Information under Section 19(1)(a) of the Competition Act, 2002 against various parties, collectively referred to as Opposite Parties (OPs), including influential individuals and companies in the cable TV network business in Chhattisgarh. The Informants alleged contravention of Sections 3 and 4 of the Act, specifically accusing OP-5, OP-6, and OP-7 of monopolizing the market through unlawful means. They claimed that OP-5 and OP-6 misused the police to intimidate competitors, leading to the seizure of shares and financial losses for the Informants. Additionally, they alleged tax evasion and coercive practices by OP-5 and OP-6 to control the cable TV market in Chhattisgarh.

The Commission noted the roles of the parties involved, distinguishing between content creators/broadcasters (OP-8 and OP-9) and distribution chain operators (MSOs and LCOs). Regarding the alleged contravention of Section 3 of the Act, the Commission found that the requirements of Section 3(3) were not met in this case, as it necessitates two or more enterprises engaging in similar trade or services. The Commission determined that the provisions of Section 3(3) were not applicable based on the relationships among the OPs and the facts presented.

Furthermore, the Commission addressed the allegations of violation of Section 4 of the Act, which deals with abuse of dominant position. It clarified that defining a relevant market and assessing dominance are crucial for examining Section 4 contravention. However, in this case, the Commission decided not to define a precise relevant market and found no imperative need to establish contravention under Section 4. The Commission emphasized that the Act does not cover cases of joint/collective dominance, leading to the rejection of the alleged violation of Section 4 against the OPs.

Ultimately, the Commission concluded that no prima facie case of contravention of Sections 3 and 4 of the Act was established based on the facts and circumstances presented. Consequently, the Information filed against the OPs was directed to be closed under Section 26(2) of the Act, and the relief sought under Section 33 was rejected. The Secretary was tasked with communicating this decision to the Informants, bringing the matter to a close.