2024 (11) TMI 1001 - CCI - Companies Law

Abuse of dominant position by DAE and IREL under Section 4 of the Competition Act, 2002 - contravention of the provisions of Section 4 of the Competition Act, 2002 - HELD THAT - From a conjoint reading of Section 2(h) of the Act and the relevant Allocation of Business Rules, it is amply clear that DAE is exempted from the purview of enterprise in terms of the provisions of the Act. Accordingly, conduct of DAE does not invite scrutiny under the provisions of the Act. Furthermore, based on the above, the Commission notes that the IREL has no role to play in renewal of the off-take agreement, rejection of import licenses, and non-approval of an alternate disposal plan. Based on the facts and circumstance of the instant case and analysis carried out in preceding paragraphs, since no prima facie case is made out either against DAE or IREL, the matter may be closed under Section 26(2) of the Act forthwith. Consequently, no case for grant of relief(s) as sought under Section 33 of the Act arises.

Issues Involved:

1. Alleged abuse of dominant position by DAE and IREL under Section 4 of the Competition Act, 2002.
2. Refusal to renew the off-take agreement for processing Uranium-bearing Leach Residue.
3. Rejection of import license applications for Columbite and Tantalite.
4. Non-approval of an alternative disposal plan.
5. Determination of whether DAE qualifies as an 'enterprise' under Section 2(h) of the Act.

Issue-wise Detailed Analysis:

1. Alleged Abuse of Dominant Position by DAE and IREL:

The Informant alleged that the Department of Atomic Energy (DAE) and IREL abused their dominant position in the market for the disposal of Uranium-bearing Leach Residue. The Informant claimed that DAE and IREL's actions were aimed at driving the Informant out of the market to benefit certain public sector entities. The Informant proposed that DAE and IREL fall under the definition of 'enterprise' as per Section 2(h) of the Competition Act, 2002, and alleged contraventions of Sections 4(2)(a), 4(2)(b)(i), and 4(2)(c) of the Act. However, the Commission concluded that DAE is exempt from the definition of 'enterprise' due to its sovereign functions, thus not subject to scrutiny under the Act.

2. Refusal to Renew the Off-take Agreement:

The Informant contended that the refusal to renew the off-take agreement after 2017 for the processing of Uranium-bearing Leach Residue was arbitrary and without any fault on its part. The Commission noted that the off-take agreement was initially entered into on the direction of DAE, and its non-renewal was also based on DAE's instructions. Therefore, the responsibility for the renewal or non-renewal of the agreement lies with DAE, not IREL.

3. Rejection of Import License Applications:

The Informant alleged that the rejection of import license applications for Columbite and Tantalite was discriminatory and aimed at foreclosing the market for the Informant. The Commission observed that the issuance of import licenses falls exclusively within the domain of DAE, and any grievances related to import licenses are essentially against DAE. Since DAE is exempt from the Act's purview, the Commission found no grounds for further investigation.

4. Non-approval of an Alternative Disposal Plan:

The Informant claimed that DAE's refusal to approve an alternative disposal plan was unjustified. The Commission noted that DAE is the competent authority for approving disposal plans related to radioactive substances, and the refusal to approve such plans is a decision within DAE's sovereign functions. As such, the Commission determined that this issue does not fall under the scope of the Competition Act.

5. Determination of Whether DAE Qualifies as an 'Enterprise':

The Commission examined whether DAE qualifies as an 'enterprise' under Section 2(h) of the Competition Act. The Act excludes government activities related to sovereign functions, including atomic energy, from the definition of 'enterprise.' The Commission reviewed the Government of India (Allocation of Business) Rules, 1961, which assign responsibilities related to atomic energy to DAE. Consequently, the Commission concluded that DAE's activities are sovereign functions and exempt from the Act's provisions.

Conclusion:

The Commission decided to close the matter under Section 26(2) of the Competition Act, 2002, as no prima facie case was established against DAE or IREL. The Commission also determined that no reliefs sought by the Informant under Section 33 of the Act were warranted. The Secretary was directed to communicate the decision to the Informant.

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