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Law of Competition - Case Laws
Showing 141 to 160 of 341 Records
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2020 (10) TMI 919
Approval of Scheme of Arrangement - Sections 230-232 of Companies Act, 2013 - HELD THAT:- The proposed scheme of compromise and arrangement should not be violative of any provisions of law and is not contrary to public policy. It is apparent from the records that there were irregularities and non-compliances from a very long time due to which Stock Exchange took action against the Respondent No. 1 Company and suspended the trading of its securities in the year 2002. Nothing has been brought on record that the Respondent No. 1 Company have taken any serious actions to make the requisite compliances so that trading of the shares of the company can be resumed. Non action of the Respondent No. 1 Company have serious impact on the investors who have invested their hard money in the company. These non-compliances and irregularities or any illegal act already committed cannot be ratified under the umbrella of “scheme” as envisaged under Section 230-232 of Companies Act, 2013.
We have also gone through the observations made by the Regional Director, Western Region, Mumbai. These objections raised by the regional directors clearly points out the irregularities and non-compliances that were present at the time of sanctioning of scheme by the NCLT. The Company must be in compliance of the provision of law and cannot act just on the basis of a legal opinion. The respondent No. 1 Company should have instantly rejected the application money for 10,375 shares as the Application applied were for less than the minimum lot size i.e. 100 shares. The assertion of the Respondent No. 1 Company that it was unaware of the BSE Rejection Letter dated 6th May, 1999 until in the year 2012 is not tenable as the company was listed and must be in touch with the Exchange for various compliances. The scheme appears to be used as a course of action to rectify the irregularities previously done/committed by the Respondent No. 1 Company. Therefore, the grounds raised by the Regional Director for dismissing the petition seems to be just and reasonable - NCLT has overruled the objections raised by the Regional Director on the ground that the objections are mere on the procedural aspects and do not raise any illegality in the scheme or that it is against public policy. Even if the objections are procedural but it is the jurisdiction of the Tribunal that such procedural aspects need to be duly complied with before sanctioning of the scheme, as it would lay down a wrong precedent which would allow companies to do whatever acts without the compliances and confirmation of the Court and other sectoral and regulatory authorities and thereafter get it ratified by the Court under the Umbrella of “scheme”. It should have been contemplated that compliance of law in itself is a part of public policy. It is the duty of the Tribunal or any court that their Orders should encourage compliances and not defaults.
The Scheme under section 230 of Companies Act, 2013 cannot be used as a method of rectification of the actions already taken. Before the scheme gets approved, the company must be in compliance with all the public authorities and should come out clean. There must be no actions pending against the company by the public authorities before sanctioning of a scheme under section 230 of the Companies Act, 2013.
Appeal allowed.
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2020 (10) TMI 700
Approval of Scheme of Amalgamation - Sections 230 and 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- The procedure specified in sub-sections (1) and (2) of section 232 of the Companies Act, 2013 has been complied with, and hence the Scheme of Amalgamation, as approved by the Petitioner Company, is hereby sanctioned, as prayed.
The Scheme of Amalgamation (enclosed as Annexure-A to this Company Petition) is hereby sanctioned and the Appointed Date shall be 01st April, 2013. The effective date of the Scheme shall be the date of this order - Application allowed.
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2020 (10) TMI 397
Sanction the scheme of amalgamation - sections 230 to 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- In his report, the Regional Director, MCA has concluded that the scheme appears to be fair, reasonable and not detrimental against the members or creditors or contrary to public policy and the same can be approved. The scheme appears to have been proposed for better performance management, for greater clarity in roles, responsibilities and performance objectives of the individual specialised divisions at the corporate as well as individual level for key management. On a consideration of the facts of the case as mentioned in the preceding paragraphs, which are not elaborated here again to avoid duplication and repetition, we are satisfied that the procedure specified in sub-sections (1) and (2) of section 232 of the Companies Act, 2013 has been complied with, and hence the scheme of amalgamation, as approved by the boards of the petitioner companies, can be sanctioned.
The scheme is sanctioned.
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2020 (9) TMI 1086
Approval of the Scheme of Amalgamation and Arrangement - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- The objections/observations to the Scheme received from RD, RoC, OL, BSE, NSE, IT Department and the Workers Union have been adequately replied by the Petitioner Company and hence, there is no impediment in the sanction of the Scheme.
The Scheme is approved and we hereby declare the same to be binding on all the shareholders and creditors of the Petitioner Companies and on all concerned. While approving the Scheme, it is clarified that this order should not be construed as an order in any way granting exemption from payment of any stamp duty, taxes, or any other charges, if any, and payment in accordance with law or in respect of any permission/compliance with any other requirement which may be specifically required under any law. With the sanction of the Scheme, the Transferor Companies shall stand dissolved without undergoing the process of winding up.
The scheme is approved.
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2020 (9) TMI 558
Sanction of Composite Scheme of Merger and Amalgamation - section 230-232 of the Companies Act, 2013 - HELD THAT:- This Tribunal directs that, in view of the fact that there are no Secured Creditors in the Transferor Company No. 1 and 2 and the certificate of the CA in respect of the same there is no need of convening a meeting of the secured creditors in the Transferor Company No. 1 and 2.
In compliance of sub-section (5) of Section 230 and Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, the Applicant Companies shall send a notice in Form No. CAA.3 along with disclosures mentioned under Rule 6, to, (i) the Central Government through the Regional Director, North-western Region, (ii) the Registrar of Companies, Gujarat, (iii) the Income Tax Authorities concerned and (iv) the Official Liquidator, stating that representations, if any, to be made by them shall be made within a period of 30 days from the date of receipt of such notice, failing which it shall be presumed that they have no objection to make on the proposed scheme. The said notices shall be sent forthwith by registered post or by speed post or by courier or by had delivery or by an e-mail at the office of the authority as required by sub-rule (2) of Rule 8 of the Companies (CAA) Rules, 2016. The aforesaid authorities, who desire to make any representations under sub-section (5) of Section 230, shall send the same to the Tribunal within a period of 30 days from the date of receipt of such notice, failing which, it will be deemed that they have no representation to make on the proposed arrangement.
Application allowed.
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2020 (8) TMI 949
Abuse of dominant position by WhatsApp and Facebook u/s Competition Act, 2002 - Locus Standi of the Informant - informant is aggrieved party of not - HELD THAT:- The Informant need not necessarily be an aggrieved party to file a case before the Commission. Neither the Act specifies any such requirement explicitly, nor the same can be implicitly read into the provisions which clearly point towards the inquisitorial system envisaged by the Parliament. Further, it is because of the inquisitorial scheme of the Act, that the Commission in appropriate cases, defends its orders in higher forums, regardless of the fact as to who brought such case before it, which is not a normal feature in adversarial proceedings. Moreover, given that there are divergent decisions of the Hon'ble Appellate forum on the question of locus of the Informant, it may not be appropriate for the Opposite Parties to challenge the maintainability of the information filed by the Informant, based on the observation in the case of SAMIR AGRAWAL VERSUS COMPETITION COMMISSION OF INDIA & ORS. [2020 (5) TMI 746 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI [LB]] alone.
Next contention is that the Informant has indulged in forum shopping being closely associated with a petitioner who has approached the Hon'ble Supreme Court against WhatsApp and Facebook and this apparent nondisclosure reveals the mala fide intent and unclean hands with which the Informant has approached the Commission. The Commission notes that though on first blush this argument looks attractive, it may not be factually correct and is legally untenable, given the scheme of the Act.
The Informant has alleged that WhatsApp and Facebook are abusing their dominant position under Section 4 of the Act. Specifically, the Informant has alleged contravention of Sections 4(2)(a)(i), 4(2)(d) and 4(2)(e) of the Act, by these OPs, besides a brief mention of 4(2)(b)(ii) and 4(2)(c). Primarily, the Informant has alleged that WhatsApp has abused its dominance in the 'market for internet-based messaging application through smartphones', to manipulate another market i.e. 'market for UPI enabled digital payment applications' in its favour. This, as per the Informant, has distorted fair competition in the latter market for the existing players and has foreclosed the said market to potential entrants.
The Commission is of the view that the relevant product market in which WhatsApp operates is the 'market for Over-The-Top (OTT) messaging apps through smartphones'. The Commission observes that though in terms of nomenclature this relevant product market appears different from the one proposed by the Informant, it largely covers the same set of players and competition dynamics.
The Commission does not find alleged contravention of the provisions of Section 4 of the Act against WhatsApp or Facebook being made out. In view of the foregoing, the Commission is of the opinion that there exists no prima facie case of contravention and the information filed is directed to be closed under Section 26(2) of the Act.
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2020 (8) TMI 700
Principle of Merger - Compensation under Section 53N(1) of the Competition Act, 2002 - aggrieved entity - violation of Section 3(3) of the Act - time limitation - applicant contends the respondents to take a plea that the Compensation Application filed by the Applicant centers around the assumption that Section 53N of the Act requires the existence of either the former Competition Appellate Tribunal (COMPAT)/ National Company Law Appellate Tribunal or the Competition Commission of India’s order - HELD THAT:- It is to be pertinently pointed out that the Section 53N of the Act speaks of ‘Awarding compensation’ and a mere perusal of the ingredients of the said Section unerringly point out that the said Section does not contemplate a Limitation period for projecting an ‘Application’. It is an axiomatic principle in Law that when no time limit is prescribed, based on the ‘Doctrine of Laches’ the relevant proceedings ought to have been filed within a reasonable period of time and that failure to do so results in serious prejudice and harm to the concerned party and adversely affects the ability of the said party to defend itself.
In fact, the Competition Act, 2002 does not either by reference or in comparison provide for any period of Limitation for the purpose of filing an Application before COMPAT to adjudicate a case for compensation arising from the findings of the CCI or from the orders of COMPAT or under Section 42A or 53Q(2). It is not in dispute that the Applicant had sent the Information through letter dated 04.02.2011 under Section 19(1) of the Act to the Hon’ble Commission alleging ‘anti-competitive behavior’ on the part of the three Respondents and another. Further, the Applicant had alleged that the Respondents had acted and resorted in a manner in regard to the tenders released by the Applicant for purchasing Aluminum Phosphate Tablet (ALP) for the period 2009-10 - As a matter of fact, the Hon’ble Commission found that the Respondents had cartelised in respect of the two tenders for purchase of ALP Tablets released by the Applicant for the period from 2009-10 and 2011-12 and also it was found out that the Respondent had colluded and fixed the prices for the year 2009 tender and collusively boycotted the 2011 tender, thereby contravening Section 3 of the Act.
Undoubtedly, a plea of Limitation cannot be determined as an abstract principle of Law divorced from facts. The question of Limitation is an mixed issue of ‘Fact and Law’. In fact, ‘Limitation bars remedy and does not destroy a right’.
This Tribunal taking into account of all the facts and circumstances of the present case in a conspectus fashion, comes to a resultant conclusion that in the present case, the ‘cause of action’ firstly arose from the decision of the CCI’s order dated 23.04.2012, which was later affirmed by the COMPAT on 29.10.2013 and attained finality - this Tribunal holds that Section 53N of the Competition Act, 2002 entail an Applicant’s ‘cause of action’ to have come into existence because of an order of the Competition Commission of India or the Competition Appellate Tribunal. Further, it cannot be lost sight of that in the instant case, the Competition Commission of India, erstwhile COMPAT and the Hon’ble Supreme Court had found that the Respondents had violated the Competition Act.
Application allowed.
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2020 (7) TMI 843
Challenge to majority arbitral award - contravention of the provisions of section 3(4) and section 4 of the Competition Act by the respondent and its group companies - petitioner filed an application under section 16 of the Arbitration Act raising a plea of jurisdiction and praying for dismissal of the claims made by the respondent for want of jurisdiction.
Whether present dispute was not arbitrable as alleged in the statement of defence? - HELD THAT:- The tribunal rightly held that the adjudication by the tribunal shall be in the nature of the right and liability of the parties to the agreement and would relate to right in personam and not right in rem. If the arbitral tribunal would have held that it had no jurisdiction in the matter and would have dismissed the claim of the respondent, the respondent would not have any remedy at all. In the proceedings before the CCI, whatever may be the outcome, the respondent would not be able to get any effective relief or decree or award directing the petitioner herein to pay the particular amount to the respondent. The arbitral tribunal rightly held that the respondent had certain rights under the 2015 SLA and thus it must also have remedy for enforcement of such rights. If the challenge to the jurisdiction of the tribunal by the respondent is upheld, it would result in dismissal of the claim without adjudication of the merits and without granting any relief to him. The tribunal accordingly rightly held that wherever there is right, there is a remedy or where there is no wrong without remedy.
Does the Competition Act apply to the 2015 Sub- license Agreement? - HELD THAT:- The arbitral tribunal held that it was clear that the question whether or not Competition Act, 2002 applies to 2015 SLA can and is to be decided only by the CCI. It is rightly held that once the CCI is empowered to determine the said question, section 61 of the Competition Act bars the arbitral tribunal from considering the said question. After adverting to section 61 of the Competition Act and after noticing the admitted facts that the CCI is still investigating the matter and no orders have yet been passed by the CCI under Section 26 or under Section 27, the arbitral tribunal rightly held that that issue will be decided by the CCI.
Whether section 61 of the Competition Act would exclude the jurisdiction of the Arbitral Tribunal in entertaining monetary claim arising out of the 2015 SLA though CCI has no jurisdiction to entertain any such monetary claim made by one party against another party to the SLA under the provisions of the Competition Act or not? - HELD THAT:- The petitioner did not dispute before this Court that the said 2015 SLA was executed after detailed negotiations held by the petitioner with full independent legal advice received by the petitioner of its implications. There is also no dispute that various State Government Price Notifications relied upon by the petitioner before this Court fixing maximum sale price at which the petitioner could sell the seeds were already existing before the execution of the said 2015 SLA between the parties. No objection about the rate was however raised by the petitioner at that stage. The trait value in respect of which the dispute between the parties arose was one of the components of maximum selling price of cotton seeds prescribed under those State Government Price notifications referred to and relied upon by the petitioner.
A perusal of the record clearly indicates that neither the petitioner nor its associate companies had during the relevant period even made any attempt to avoid the said 2015 SLA and had availed off the benefits under the said agreement. Even before the CCI, the petitioner and its associate companies had never sought avoidance of 2015 SLA but had challenged the termination of notice issued by the respondent thereby terminating the 2015 SLA and had prayed for the stay of termination of 2015 SLA - the stand taken by the petitioner is totally inconsistent with each other and is mutually destructive. Even during the course of the arguments, none of the counsel appearing for the petitioner addressed this Court on the issue of quantification of the amount awarded by the arbitral tribunal or on the merit of the claim decided by the arbitral tribunal in the impugned award but addressed only on the issue of jurisdiction of the arbitral tribunal.
Reliance placed on Section 17 of the Arbitration Act in support of the submission that the arbitral tribunal is empowered to suspend the arbitral proceedings is misplaced. Under Section 17, the arbitral tribunal is empowered to grant interim measures on the grounds and the circumstances set out in the said provision. Section 17 does not empower the arbitral tribunal to suspend the arbitral proceedings.
It is thus clear beyond reasonable doubt that the arbitral tribunal could neither terminate nor suspend the arbitral proceedings before the CCI under the provisions of the Competition Act nor could refuse to deal with the monetary claims arising out of the 2015 SLA merely on the ground that the issue of validity of the 2015 SLA by the Central Government by filing a reference or in view of the information filed by the petitioner before the CCI under provisions of the Competition Act is pending before the CCI - there is no substance in the submission made by the learned senior counsel for the petitioner that the arbitral tribunal ought to have awaited for the outcome of the pending proceedings before the CCI and could not have made an arbitral award though admittedly there was no dispute on the merits of the claim. There is no substance in the submission that the issues in the arbitral proceedings being related to the issues pending before the CCI and thus even if the part of the claims were arbitrable and other part was not arbitrable, the entire proceedings before the arbitral tribunal became non-arbitrable.
There is no merit in the submission of the learned senior counsel for the petitioner that the respondent could have applied for extension of time for indefinite period for making an arbitral award or for some period beyond the date of disposal of proceedings before CCI under Section 29A(4) of the Arbitration Act. This submission is in the teeth of Section 29A(4). Court has no power to grant such extension for indefinite period or to indirectly suspend the arbitral proceedings under Section 29A (4) of the Arbitration Act.
Whether or not the Competition Act applies to the 2015 SLA? - HELD THAT:- If the arbitral tribunal would have rendered a finding one way or the other on the issue nos.3(a) to 3(f) as formulated based on the pleadings filed by the respondent, that would have amounted to the arbitral tribunal exceeding its jurisdiction and would have been in violation of Section 61 of the Competition Act and not otherwise. The decision of the arbitral tribunal awarding the monetary claims made by the respondent under the said 2015 SLA would not amount to the arbitral tribunal wrongly assuming the existence of jurisdictional facts. The arbitral tribunal is empowered to exercise powers in view of the existence of arbitration agreement and to find out whether the claims made before it are arbitrable or not. Such exercise would not amount to assuming the existence of the jurisdiction facts.
In view of the limited judicial intervention prescribed under section 5 of the Arbitration Act, the arbitral tribunal or this Court could not have either terminate or suspend the arbitral proceedings in view of there being no such power available or prescribed under the Arbitration Act for either termination of the arbitral proceedings or for suspension thereof in view of the pendency of the complaint filed by the Central Government or the information filed by the petitioner before the CCI.
The judgment of Supreme Court in case of Mahavir J. Patil [2009 (4) TMI 1067 - SUPREME COURT] relied upon by the learned senior counsel for the petitioner is clearly distinguishable in the facts of this case. Supreme Court in the said judgment had considered Section 12 of the Resettlement Act, 1976 and held that it was the clear legislative intent as Section 12 of the Resettlement Act clearly stipulated that any transfer by way of sale, partition, etc after the date of notification under Section 11 would be void. It is held that where the statue itself is against a transfer, it is the statue which will pre-dominate vis-a-vis the other consideration. The said judgment would not apply to the facts of this case even remotedly.
A perusal of the award clearly indicates that the arbitral tribunal has rightly allowed the monetary claims made by the respondent after considering the pleadings, evidence, oral and written arguments advanced by the parties. In so far as the merit of the claim is concerned, the petitioner did not raise any dispute on the quantification nor agitated any submission across the bar while arguing the arbitration petition at length before this Court. None of the findings rendered by the arbitral tribunal shows any perversity or any patent illegality in the impugned award - no case is thus made out by the petitioner for intervention with the impugned award in Commercial Arbitration Petition and thus the said petition deserves to be dismissed.
Challenge to tribunal's award on the grounds of public policy and patent illegality - HELD THAT:- The court found no evidence of such violations. The tribunal's decision was based on a plausible interpretation of the contract and the evidence, and thus did not warrant interference under Section 34 of the Arbitration Act.
Conclusion - A perusal of the award clearly indicates that the arbitral tribunal has rightly allowed the monetary claims made by the respondent after considering the pleadings, evidence, oral and written arguments advanced by the parties. In so far as the merit of the claim is concerned, the petitioner did not raise any dispute on the quantification nor agitated any submission across the bar while arguing the arbitration petition at length before this Court. None of the findings rendered by the arbitral tribunal shows any perversity or any patent illegality in the impugned award.
The petitions challenging the arbitral award dismissed.
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2020 (5) TMI 754
Condonation of delay in filing appeal - whether period of 730 days including 693 days spent by the Appellant- Informant in seeking remedy before the Hon’ble High Court qua the order impugned dated 28th November, 2017 passed by the Competition Commission of India u/s 26(2) of the Competition Act, 2002 can be condoned?
HELD THAT:- While the Appellant seeks condonation of delay on grounds which are not severable from the merits of the case, it is apt to notice that no reason much less a cogent lawful reason/ excuse has been assigned for a delay of around two years in preferring the statutory appeal under Section 53B of the Act. The Appellant appearing in person filed written submission in support of his oral arguments reiterating the same grounds as were urged in Writ Petitions and Writ Appeals before the Hon’ble High Court. It is canvassed that the Appellant spent 693 days in proceedings before the Hon’ble High Court since there was denial of natural justice by Commission. He continued to lay stress on the proposition that Writ Jurisdiction can be invoked even when alternate remedy is available if there was denial of natural justice and the impugned order was obtained by fraud.
It is indisputable that competition concerns raised with regard to all anti- competitive activities in whatever form or manifestation are effectively dealt with under the Act which provides an efficacious remedy in the form of statutory appeal under Section 53B of the Act. It being the admitted position that efficacious legal remedy in the form of appeal is available within the adjudicatory mechanism under the Act, an unscrupulous litigant aggrieved of any order, direction and decision of the Commission under the Act cannot be allowed to choose the remedies under law and invoke writ jurisdiction of the Hon’ble High Court under the pretext of the impugned order being non est and emanating out of an inquiry, investigation or trial held in breach of the principles of natural justice. Such course, if permitted, would provide leverage to unscrupulous litigants to go for forum shopping. Such practice has to be deprecated.
Having regard to the legislative intent behind the enactment of Act, the provisions of Limitation Act, 1963 stand excluded by necessary implication. Thus, it is not open to Appellant to take recourse to Section 5 of the Limitation Act, 1963 providing for extension of period of limitation prescribed under the Limitation Act, 1963 which has no application to appeal in hand.
Conclusion - The appellant's appeal was barred by limitation due to the lack of sufficient cause for the delay in filing.
Appeal dismissed.
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2020 (5) TMI 753
Anti-competitve action - abuse of dominant position - contravention of the provisions of Sections 3 and 4 of the Competition Act, 2002 - HELD THAT:- The opinion of the Commission in regard to OP-1 holding relatively and comparably an inferior position as compared to giants like Sahara, Parsvanath, Omaxe with bigger projects and better resources knocks the bottom of an argument advanced on behalf of the Informants in regard to the OP-1 holding the dominant position in the relevant geographic market i.e. Lucknow qua the development and sale of residential flats which is the relevant product market in the case. The Informants may have grievances in regard to the deficiency in services in as much as the quality of construction of the project may have been compromised by the Developer i.e. OP-1 and that the area earmarked for providing common facilities was partially utilised for raising more residential towers thereby shrinking the space reserved for common facilities at the cost of comfort of the allottees besides extracting more money in the form of additional charges for maintenance and parking space beyond the stipulations in the Agreement but that would be a breach of the contractual obligation entitling the allottees to claim compensation.
On consideration of the material on record and the reasons assigned by the Commission, there are no doubt that OPs 1 to 4 were not holding dominant position in the relevant market which, being residential apartment project is different from residential plot and commercial building projects, thereby justifying the conclusion that the relevant product market and the relevant geographical market have been flawlessly identified. Once OPs 1 to 4 were not dominant players in the relevant market, question of abuse of dominant position does not at all arise. The Competition concerns raised by the Informants are unfounded though for alleged breach of contractual obligation they may have a cause before the Competent Forum.
There being no legal infirmity in the impugned order, the appeal is dismissed.
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2020 (5) TMI 747
Jurisdiction of CCI to examine the issues raised relating to the exercise of rights granted under the Patents Act - Direction to Director General (DG) to investigate the activities of the petitioners and Maharashtra Hybrid Seeds Company (Mahyco) - trait fee charged by MMBL and the other terms and conditions imposed by it for using the technology for manufacturing Bt. Cotton Seeds - HELD THAT:- Section 60 of the Competition Act contains a non obstante provision and expressly provides that the provisions of the Competition Act would have effect notwithstanding anything inconsistent contained in any other law for the time being in force. This Court held that although Section 60 of the Competition Act expressly provided that the Competition Act would be given an overriding effect, the same would not whittle down the provisions of the Patents Act. This Court is of the view that Section 62 of the Competition Act which expressly provides that the Competition Act would be in addition to and not in derogation of the provisions of any other law for the time being in force, clearly expresses the legislative intent that the Competition Act is in addition to other laws and not in substitution thereof.
This Court next examined the issue whether there was any irreconcilable conflict between the Competition Act and the Patents Act and whether both the enactments could be construed harmoniously. This Court had noticed that Chapter XVI and Section 140 of the Patents Act contained provisions the subject matter of which may be common with the Competition Act. Section 84 of the Patents Act provides for grant of compulsory licenses in certain cases where reasonable requirement of public in respect of patented inventions has not been satisfied. Section 85 of the Patents Act provides for revocation of patents if after expiry of two years from the date of grant of compulsory license, the patented invention has not been worked in the territory of India and the reasonable requirements of public with respect to the patent have not been satisfied.
As is apparent from the plain language of sub-section (5) of Section 3 that nothing contained in Section 3 of the Competition Act would restrict the right of a person to restrain any infringement of his IPR or to impose reasonable conditions for protecting them. It recognizes that a person has a right to restrain infringement of IPR granted under the specified statutes and any agreement entered for the aforesaid purpose would fall outside rigors of Section 3 of the Competition Act. However, such rights are not unqualified. Only such agreements that are "necessary for protecting any of his rights which have been or may be conferred upon him under" the specified statutes are provided the safe harbor under Sub-section (5) of Section 3 of the Competition Act and only to such extent.
The question whether an agreement is limited to restraining infringement of patents and includes reasonable conditions that may be necessary to protect such rights granted to a patentee, is required to be determined by the CCI. Subsection (5) of section 3 of the Competition Act does not mean that a patentee would be free to include onerous conditions under the guise of protecting its rights.
It is also relevant to note that the role of TRAI as a regulator is materially different from that of a Controller. Telecom services are regulated and controlled and TRAI has a vital role in regulating the industry - The principal function of the Controller under the Patents Act is to examine the application for grant of patents and grant patents if the applicant is entitled to such rights. Although, the Controller also exercises other powers and performs other functions, including issuance of compulsory licenses in given case. But the Controller does not regulate, in a pervasive manner, the exercise of patent rights or the agreements that are entered into by patentees with third parties. The nature of the role performed by a Controller, thus, cannot be equated to that as performed by the TRAI.
This Court finds no reason to interfere with the impugned order. It is also relevant to note that an order passed by the CCI under Section 26(1) of the Competition Act is an administrative order and, therefore, unless it is found that the same is arbitrary, unreasonable and fails the wednesbury test, no interference would be warranted. A review on merits is impermissible at this stage, and therefore, this court is refraining from examining the merits of the dispute.
The petitioners' challenge to the order dated 18.02.2016 is also not maintainable. By the aforesaid order, the CCI had merely issued notice and afforded the petitioners for an opportunity to be heard before considering the application filed by the informants under Section 33 of the Competition Act. This Court finds no reason whatsoever to interfere with the said order. The petition-W.P.(C) 1776/2916 is unmerited and, therefore, dismissed. All pending applications are also disposed of.
Petition dismissed.
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2020 (5) TMI 746
Unfair price fixation mechanism and abuse of dominant position - Contravention of provisions of Section 3 of the Competition Act, 2002 - alleged collusion on the part of drivers through the cab aggregators App who purportedly used algorithm to fix prices which the drivers were bound to accept - Allegation of hub-and-spoke cartel involving drivers and cab aggregators - price discrimination under Section 4(2)(a)(ii) of the Act - HELD THAT:- It is apt to notice the procedure governing inquiry by the Commission in allegations of anti-competitive agreements, including price fixation, cartelisation and abuse of dominant position. Section 19 of the Act provides for inquiry into certain agreements and dominant position of enterprise.
It is true that the concept of locus standi has been diluted to some extent by allowing public interest litigation, class action and actions initiated at the hands of consumer and trade associations. Even the whistle blowers have been clothed with the right to seek redressal of grievances affecting public interest by enacting a proper legal framework. However, the fact remains that when a statute like the Competition Act specifically provides for the mode of taking cognizance of allegations regarding contravention of provisions relating to certain anti-competitive agreement and abuse of dominant position by an enterprise in a particular manner and at the instance of a person apart from other modes viz. suo motu or upon a reference from the competitive government or authority, reference to receipt of any information from any person in section 19(1) (a) of the Act has necessarily to be construed as a reference to a person who has suffered invasion of his legal rights as a consumer or beneficiary of healthy competitive practices - There is nothing on the record to show that he has suffered a legal injury at the hands of Ola and Uber as a consumer or as a member of any consumer or trade association. Not even a solitary events of the Informant of being a victim of unfair price fixation mechanism at the hands of Ola and Uber or having suffered on account of abuse of dominant position of either of the two enterprises have been brought to the notice of this Appellate Tribunal. We are, therefore, constrained to hold that the Informant has no locus standi to maintain an action qua the alleged contravention of Act.
Admittedly, under the business model of Ola, there is no exchange of information amongst the drivers and Ola. The taxi drivers connected with Ola platform have no inter se connectivity and lack the possibility of sharing information with regard to the commuters and the earnings they make out of the rides provided. This excludes the probability of collusion inter se the drivers through the platform of Ola. In so far as Uber is concerned, it provides a technology service to its driver partners and riders through the Uber App and assist them in finding a potential ride and also recommends a fare for the same. However, the driver partners as also the riders are free to accept such ride or choose the App of competing service, including choosing alternative modes of transport.
Any view taken by the Commission without recording reasons would demonstrate lack of application of mind and exercise of arbitrary power which cannot be supported. In the instant case, the Commission has dealt with the allegations clearly identifying the issues and recording its opinion thereon in the light of law and contemporary decision occupying the field. Nothing to the contrary could be demonstrated by the Informant to warrant interference.
There is no substance in the allegations emanating from the Informant - The opinion of the Commission in regard to non-existence of a prima facie case warranting closure of the information cannot be faulted on any ground - there are no legal infirmity in the impugned order - appeal dismissed.
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2020 (5) TMI 707
Seeking approval of Resolution Plan - Approval of the Carval Resolution Plan by CoC is in breach of proviso to Section 31(4) of the Code or not - Discrimination against Operational Creditor - Deliberate suppression of vital facts - Violation of IBC as amended, Corporate Insolvency Resolution Process or not - HELD THAT:- When any condition is mentioned in the plan and that condition is required to be fulfilled by the stakeholders after approval of the plan by the CoC, and accomplishment of the provisions of the plan is contingent upon some future actions after approval, then there could be a situation of uncertainty in future in fulfilling of the provisions of the plans, but here in this situation, since interlinking already been approved the Carval Plans alone being approved, nothing has remained contingent, the Resolution Applicant is under unconditional obligation to fulfil the provisions of the Plans, therefore there are no merit in the objection raised by Jatia Group.
Approval of the Carval Resolution Plan by CoC is in breach of proviso to Section 31(4) of the Code or not - HELD THAT:- In the cases of combination, the Adjudicating Authority is mandated to examine as to whether approval is obtained from CCI or not, if not approved, it will not be approved by the Adjudicating Authority. Moreover, in the proviso, it is not said that if approval of CCI is not obtained before CoC approved the plans; the plan approved by the CoC would amount to nullity. Above all, it is not that plans are without approval of CCI, the difference is -approvals are ex-post facto approvals, not ex-ante approvals. If this difference makes any difference to the rights of anybody, then these approvals shall be put to test as to whether post facto approval caused any grievance to any of the stakeholders. It is not the case that by virtue of this post facto approval, Jatia group rights are affected - CCI approval is in no way connected to the commercials CoC examines, since CCI is the Regulatory authority to avoid unhealthy competition in the market, CCI approval is mandatory to the approval of the plan, so that this infraction would not become hindrance if the plan is approved by CCI after CoC has approved. Here plans were approved by CCI.
Discrimination against Operational Creditor - HELD THAT:- If at all equitable treatment is set as a test to approve the Resolution Plan ignoring the provisions of the Code, it always differs from case to case and from person to person. It is only a perception. Perception is always dependent upon the mindset of the person dealing with it, which ultimately will become a threat to predictability and certainty. When the Code is clear as to how to go about, with all humility I hold that this test is beyond the scope of Sec. 53 r/w Section 30(2) of the Code, for this reason only the Honourable Supreme Court time and again reiterated that the Adjudicating Authority shall not enter into the aspects left to be decided by the CoC - As to maximisation of the assets of the Corporate Debtor and keeping the company as a going concern, it is the point to be decided by the CoC. Unless it is pointed out that the CoC examination is vitiated by fraud, the Adjudicating Authority is not expected to interfere with the decision of the CoC.
Deliberate suppression of vital facts - HELD THAT:- It appears the Resolution Application filed revised PBG so as to meet the requirements as mentioned in the format. It is not the case of the Noble counsel that PBG given by the Resolution Applicant is not proportionate to the value of the plan. At the end of the day, one has to see as to whether PBG equivalent to the requirement has been given or not, while approving plans, it is quite common, the Resolution Applicant offers something, when something offered is not in compliance of the requirement, CoC would ask for compliance, if the applicant fulfills the compliance, CoC would further proceed with the plan. In this case also, same thing happened. PBG is normally taken to bind the Resolution Applicant to fulfill the plan; it will not make any difference to quantum of payment and timings mentioned in the plans - there are no merit in the objections raised by Nobel. When the Operational Creditor they will only get their share as set out in the Code. It cannot be seen whether Operational Creditors are receiving money equivalent to the money Financial Creditors getting, because operational creditors as a class cannot equate themselves with the financial creditors and ask for more than what they are entitled u/s 53 r/w section 30(2) of the Code.
With regard to other objections, such as some financial creditors arising discussions in the CoC meeting with regard to the approval of the resolution plans, it is to be seen as to whether the Financial Creditors who raised queries in the meetings have voted in favor of the plan or against the plan and whether the approval is with requisite majority or not. If the approval is given with requisite majority, the discussions taken place in the meeting cannot invalidate the plans duly approved by the CoC.
There are no merit in the objections raised by Noble - the Resolution Plan approved by the CoC of Metallics and the Resolution Plan approved by the CoC of Value Steels are hereby approved.
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2020 (3) TMI 1484
Anti-competitive action - abuse of dominant position - relevant market - Opposite Party is dominant in the said relevant market or not AGL has abused its dominant position in the relevant market.
Whether AGL is dominant in the said Relevant Market? - HELD THAT:- A vital question for consideration which cannot be glossed over and is of primary importance in regard to status of Industrial Consumers as a distinct category is whether there is any gaseous substitute for natural gas for the Industrial Consumers. It emerges from the record that two types of agreements were offered by AGL to Industrial Consumers viz. (a) MGO Contract, whereby the off taker agrees to purchase a minimum amount of natural gas ensuring a minimum level of supply to the buyer and stable revenue to the supplier and (b) Non-MGO Contracts, where the buyer is not under any obligation to purchase a minimum level of gas and has the liberty to purchase gas based on its requirement.
the only conclusion deducible on the basis of material available on record is that during the relevant period there was no gaseous substitute of natural gas available to Industrial Units in Faridabad. It is emphatically clear that PNG was not interchangeable with other fuels as contended on behalf of AGL. Furthermore, it cannot be ignored that during the relevant period LPG was not available to Industrial Units as an alternate fuel as revealed from the submissions made before the DG. It is therefore futile on the part of AGL to contend that it had successfully demonstrated that PNG was interchangeable with other fuels at the relevant time. Having regard to all relevant considerations and the material available on record, we find no hesitation in supporting the finding recorded by the Commission on the aspect of ‘relevant market’ and ‘AGL’s dominant position in the relevant market’. The fact that the pipeline infrastructure setup by AGL subsequently can be used now by any other competitor to distribute CNG does not create any dent in the aforesaid finding. As a sequel thereto, we affirm the finding that the Appellant – AGL occupied a position of strength making it the dominant player and enjoying dominant position in the relevant market.
Alleged abuse of dominant position be it seen that the Commission in its impugned order held against AGL contravention - HELD THAT:- On a plain reading of the provision engrafted in Section 27 of the Act, it emerges that contravention of Section 3 or Section 4 of the Act being established, the Commission is empowered to pass all or any of the orders envisaged under Clauses (a) to (g). The language of this provision leaves no scope for doubt that the Commission may, befitting the circumstances of a case, pass any order falling under either one or more of the Clauses in combination or even encompassing all the Clauses. The term ‘any’ has to be accorded a purposive and a creative interpretation which can be explained on no hypothesis other than the one that it embraces one, more than one, some, many and all.
In the instant case, the Commission passed orders under Clauses (a), (b) & (d) of Section 27. Under Section 27(a), Commission directed AGL to cease and desist from indulging in the contravening conduct; under Section 27(b), the Commission imposed a penalty of 4% of the average turnover of the last three years while under Section 27(d), the Commission directed AGL to modify the Gas Supply Agreements (GSAs) in light of observations in the impugned order. So far as direction under Section 27(a) is concerned, no exception can be taken to it. AGL has to be restrained perpetually from indulging in the contravening conduct. Now before coming to quantum of penalty under Section 27, it is apt to ascertain whether AGL has modified the Gas Supply Agreements (GSAs) to bring it out of the offending, violative and contravening conduct.
Conclusion - AGL enjoyed a dominant position, its dominance prevailed in the relevant market, and it abused its dominant position by imposing unfair conditions. The penalty imposed on AGL is modified by reducing it from 4% to 1% of the average turnover for the relevant years.
Appeal disposed off.
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2020 (3) TMI 1483
Anti-competitive action - abuse appreciable adverse effect on competition (AAEC) within the relevant market in India - procedural requirements under Sections 29 and 30 of the Competition Act, 2002.
HELD THAT:- The question as to how a notice on proposal of combination in terms of Section 6(2) was required to be considered came for consideration before this Appellate Tribunal in TA(AT)(Competition) No.32 of 2017 (appeal No.43 of 2016), Piyush Joshi Vs Competition Commission of India [2019 (7) TMI 2006 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] where it was held that 'on receipt of notice from a person or enterprise, who or which proposes to enter into a combination, if the Commission forms opinion that no prima facie case emerges to hold that a combination is likely to cause, or has caused an appreciable adverse effect on competition within the relevant market in India, is not required to follow the procedure under Section 29 and Section 30 of the Act and required to pass order of approval under Section 31.'
The Commission observed that both the parties to the Proposed Combination are entities with foreign investments and are thus governed by the Foreign Director Investment Policy which explains B2b Sales as “Cash and Carry Wholesale trading/Wholesale trading, would mean sale of goods/merchandise to retailers, industrial, commercial, institutional or other professional business users or to other wholesalers and related subordinated service providers. Wholesale trading would, accordingly, imply sales for the purpose of trade, business and profession, as opposed to sales for the purpose of personal consumption. The yardstick to determine whether the sale is wholesale or not would be the type of customers to whom the sale is made and not the size and volume of sales. Wholesale trading would include resale, processing and thereafter sale, bulk imports with export/ex-bonded warehouse business sales and B2B e-commerce. This lays the boundaries of B2B sales within which the parties to the combination have to operate.
The Commission specifically and rightly came to a finding in absence of any evidence on record that the proposed combination is not resulting in elimination of any major player in the relevant market. The appellant has failed to show that any major player in the relevant market will be eliminated due to combination in question.
This Appellate Tribunal in Piyush Joshi [2019 (7) TMI 2006 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI], held that in absence of any prime facie opinion framed, that the combination is likely to cause or has caused appreciable adverse effect on the competition within the relevant market in India, the Commission is not required to following the procedure under Section 29 and Section 30 of the Act and is required to pass order of approval under Section 31. In the present case there are no prime facie case has been made out on the facts of the case or by appellant. There is no requirement on the part of the Commission to follow the procedure under Section 29 and 30 of the Act and it rightly passed order of approval under Section 31 of the Act.
Conclusion - In absence of any prime facie opinion framed, that the combination is likely to cause or has caused appreciable adverse effect on the competition within the relevant market in India, the Commission is not required to follow the procedure under Section 29 and Section 30 of the Act.
There are no merit in this appeal. It is accordingly dismissed.
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2020 (3) TMI 1482
Anti-competitive conduct - abuse of dominant position - Association of Malayalam Movie Artists (AMMA) and Film Employees Federation of Kerala (FEFKA) - violation of Sections 3 and 4 of the Competition Act, 2002 - HELD THAT:- There are large number of evidences which have been relied upon by the DG and also by the Commission to come to a definite conclusion about the Appellant(s) indulged in anti-competitive conduct in violation of the provision of Section 3 of the Act. Accordingly, the Appellants - Association of Malayalam Movie Artists (AMMA/Opposite Party No. 1/ OP-1); Film Employees Federation of Kerala (FEFKA/Opposite Party No. 2/OP-2); FEFKA Director’s Union’ (Opposite Party No. 6/ OP-6); and FEFKA Production Executive’s Union (Opposite Party No. 7/ OP-7) and their office bearers were found to be liable under Section 48 of the anti-competitive conduct.
Conclusion - The trade unions are not exempt from the Competition Act and that anti-competitive agreements need not be formalized to be actionable.
Appeal dismissed.
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2020 (3) TMI 1446
Non-notification of acquisition of Novartis Animal Health in India (NAH India), a business with sales of only INR 93.0 crores and assets of only INR 36.2 crores - Section 53B (1) and (2) of the Competition Act, 2002 - HELD THAT:- The Commission has failed to appreciate that the Notification dated 04.03.2011 was squarely applicable to the present transaction on the basis of an erroneous interpretation which is contrary to the intention of the exemption as expressed by the Government itself vide a notification dated 27.03.2017 (Subsequent Notification) and Press Release dated 30.03.2017 - The intention behind the Notification dated 04.03.2011 issued by the Central Government under Section 54 of the Act was to exempt certain transactions due to their small size. The intention of the Government is made clear by the Press Release dated 30.03.2017 where it is stated that "combinations falling within the threshold limits would not require to be filed before the Competition Commission of India. The reform is in pursuance of the Government's objective of promoting Ease of Doing Business in the country and is expected to make India a more attractive destination for Foreign Direct Investment. The notification is expected to enable greater freedom to industry in taking legitimate business decisions towards further accelerating India's economic growth."
This makes it clear that the Central Government did not wish that the CCI interfere in acquisition of an enterprise that was de minimis or acquisition of assets that were de minimis.
For the purpose of the calculation of assets and turnover what is being acquired is relevant, as the assets/turnover of what is left over with the sellers after the acquisition will have no role to play in the context of the business conducted by the purchaser post-acquisition - In the present case, the 'Stock and Asset Purchase Agreement' covering the global portion of the transaction dated 22nd April, 2014 was publicly announced and notified under the merger control laws in several jurisdictions around the world, including the United States and the European Union. The transaction was cleared in each jurisdiction and closed on 1st January, 2015.
Since the turn over attributed to the business acquired was Rs. 93.9 Crores and the value of the assets being acquired was Rs. 36.2 Crores, the 'enterprise's' acquired assets of the value being more than Rs. 250 Crores or turn over not more than Rs. 750 crores, the Appellant is exempted from the provision of Section 5 of the Act and was not required to notify in terms of Section 6(2) of the Act - The delegated legislation, namely The Competition Commission of India (Procedure in Regard to the Transaction of Business Relating to Combinations) Regulations, 2011 which states that in case of an acquisition, the obligation to file the notice is with the acquirer is contrary to the express statutory provision and the intent thereof.
The Commission having failed to appreciate the aforesaid position and in view of finding as recorded, the impugned order is set aside - appeal is allowed.
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2020 (3) TMI 1275
Approval of scheme of amalgamation - Section 230-232 of the Companies Act, 2013 read with Attendant Rules of the Companies (Compromise, Arrangement and Amalgamation) Rules, 2016 - HELD THAT:- The date of hearing of the petition filed by the petitioner for the approval of the Scheme is fixed on 08.04.2020.
Notice of the hearing shall be advertised in the Newspapers, namely, Mahanagar Times, Jaipur Edition (vernacular) and Indian Express, Jaipur Edition (English) not less than ten days before the aforesaid date fixed for hearing.
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2020 (2) TMI 1130
Steps for Financial Scheme of Compromise and Arrangement between Applicant, Arun Kumar Jagatramka (Promoter) and the Company (Corporate Debtor) - Whether in a liquidation proceeding under Insolvency and Bankruptcy Code, 2016 the Scheme for Compromise and Arrangement can be made in terms of Sections 230 to 232 of the Companies Act? - If so permissible, whether the Promoter is eligible to file application for Compromise and Arrangement, while he is ineligible under Section 29A of the I&B Code to submit a 'Resolution Plan'?
HELD THAT:- Even during the period of Liquidation, for the purpose of Sections 230 to 232 of the Companies Act, the 'Corporate Debtor' is to be saved from its own management, meaning thereby the Promoters, who are ineligible under section 29A, are not entitled to file application for Compromise and Arrangement in their favour under section 230 to 232 of the Companies Act. Proviso to section 35(f) prohibits the Liquidator to sell the immovable and movable property or actionable claims of the 'Corporate Debtor' in Liquidation to any person who is not eligible to be a Resolution Applicant.
From section 35, it is clear that the Promoter, if ineligible under Section 29A cannot make an application for Compromise and Arrangement for taking back the immovable and movable property or actionable claims of the 'Corporate Debtor'.
The National Company Law Tribunal by impugned order dated 15th May, 2018, though ordered to proceed under sections 230 to 232 of the Companies Act, failed to notice that such application was not maintainable at the instance of 1st Respondent-Arun Kumar Jagatramka (Promoter), who was ineligible under section 29A to be a 'Resolution Applicant' - case remitted to 'Liquidator'/ Adjudicating Authority for taking fresh decision - appeal allowed by way of remand.
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2020 (1) TMI 1712
Seeking a writ of prohibition against Competition Commission of India from exercising its jurisdiction under Competition Act, 2002 - vires of several Sections of the Act are under challenge before the Hon'ble Supreme Court of India, but no orders have been passed as on date - HELD THAT:- Undisputed fact is, the Act is in force as on date. Hence, no writ of prohibition can be issued against Statutory Commission from exercising its jurisdiction. Hence, petition is misconceived and it is accordingly dismissed.
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